Correlation Between Tantalus Systems and Asia Pacific

Can any of the company-specific risk be diversified away by investing in both Tantalus Systems and Asia Pacific 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 Tantalus Systems and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tantalus Systems Holding and Asia Pacific Wire, you can compare the effects of market volatilities on Tantalus Systems and Asia Pacific 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 Tantalus Systems with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tantalus Systems and Asia Pacific.

Diversification Opportunities for Tantalus Systems and Asia Pacific

-0.18

Correlation Coefficient

Tantalus Systems  Asia Pacific

Good diversification

The 3 months correlation between Tantalus and Asia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tantalus Systems Holding and Asia Pacific Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Wire and Tantalus Systems 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 Tantalus Systems Holding are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Wire has no effect on the direction of Tantalus Systems i.e., Tantalus Systems and Asia Pacific go up and down completely randomly.

Pair Corralation between Tantalus Systems and Asia Pacific

Assuming the 90 days horizon Tantalus Systems is expected to generate 13.51 times less return on investment than Asia Pacific. But when comparing it to its historical volatility, Tantalus Systems Holding is 1.73 times less risky than Asia Pacific. It trades about 0.01 of its potential returns per unit of risk. Asia Pacific Wire is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  139.00  in Asia Pacific Wire on December 29, 2024 and sell it today you would earn a total of  15.00  from holding Asia Pacific Wire or generate 10.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Tantalus Systems Holding  vs.  Asia Pacific Wire

Tantalus Systems Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tantalus Systems Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Tantalus Systems is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Asia Pacific Wire

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pacific Wire are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Asia Pacific exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tantalus Systems and Asia Pacific

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

The idea behind Tantalus Systems Holding and Asia Pacific Wire 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.