Correlation Between ARIP Public and Akkhie Prakarn

Can any of the company-specific risk be diversified away by investing in both ARIP Public and Akkhie Prakarn at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ARIP Public and Akkhie Prakarn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARIP Public and Akkhie Prakarn Public, you can compare the effects of market volatilities on ARIP Public and Akkhie Prakarn and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ARIP Public with a short position of Akkhie Prakarn. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARIP Public and Akkhie Prakarn.

Diversification Opportunities for ARIP Public and Akkhie Prakarn

0.83

Correlation Coefficient

ARIP Public  Akkhie Prakarn

Very poor diversification

The 3 months correlation between ARIP and Akkhie is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ARIP Public and Akkhie Prakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akkhie Prakarn Public and ARIP Public is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ARIP Public are associated (or correlated) with Akkhie Prakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akkhie Prakarn Public has no effect on the direction of ARIP Public i.e., ARIP Public and Akkhie Prakarn go up and down completely randomly.

Pair Corralation between ARIP Public and Akkhie Prakarn

Assuming the 90 days trading horizon ARIP Public is expected to generate 1.0 times more return on investment than Akkhie Prakarn. However, ARIP Public is 1.0 times less risky than Akkhie Prakarn. It trades about 0.05 of its potential returns per unit of risk. Akkhie Prakarn Public is currently generating about 0.04 per unit of risk. If you would invest  95.00  in ARIP Public on September 1, 2024 and sell it today you would lose (36.00) from holding ARIP Public or give up 37.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

ARIP Public  vs.  Akkhie Prakarn Public

ARIP Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ARIP Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, ARIP Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Akkhie Prakarn Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akkhie Prakarn Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Akkhie Prakarn disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ARIP Public and Akkhie Prakarn

The main advantage of trading using opposite ARIP Public and Akkhie Prakarn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARIP Public position performs unexpectedly, Akkhie Prakarn can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Akkhie Prakarn will offset losses from the drop in Akkhie Prakarn's long position.

The idea behind ARIP Public and Akkhie Prakarn Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.