Correlation Between PINTHONG INDUSTRIAL and AP Public

Can any of the company-specific risk be diversified away by investing in both PINTHONG INDUSTRIAL and AP Public 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 PINTHONG INDUSTRIAL and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PINTHONG INDUSTRIAL PARK and AP Public, you can compare the effects of market volatilities on PINTHONG INDUSTRIAL and AP Public 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 PINTHONG INDUSTRIAL with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of PINTHONG INDUSTRIAL and AP Public.

Diversification Opportunities for PINTHONG INDUSTRIAL and AP Public

0.09

Correlation Coefficient

PINTHONG INDUSTRIAL  AP Public

Significant diversification

The 3 months correlation between PINTHONG and AP Public is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PINTHONG INDUSTRIAL PARK and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL PARK are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of PINTHONG INDUSTRIAL i.e., PINTHONG INDUSTRIAL and AP Public go up and down completely randomly.

Pair Corralation between PINTHONG INDUSTRIAL and AP Public

Assuming the 90 days trading horizon PINTHONG INDUSTRIAL PARK is expected to generate 1.71 times more return on investment than AP Public. However, PINTHONG INDUSTRIAL is 1.71 times more volatile than AP Public. It trades about 0.07 of its potential returns per unit of risk. AP Public is currently generating about -0.01 per unit of risk. If you would invest  299.00  in PINTHONG INDUSTRIAL PARK on September 4, 2024 and sell it today you would earn a total of  336.00  from holding PINTHONG INDUSTRIAL PARK or generate 112.37% return on investment over 90 days.

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

PINTHONG INDUSTRIAL PARK  vs.  AP Public

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, PINTHONG INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

AP Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, AP Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PINTHONG INDUSTRIAL and AP Public

The main advantage of trading using opposite PINTHONG INDUSTRIAL and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PINTHONG INDUSTRIAL position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.

The idea behind PINTHONG INDUSTRIAL PARK and AP 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.