Correlation Between AJ Advance and Peerapat Technology

Can any of the company-specific risk be diversified away by investing in both AJ Advance and Peerapat Technology 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 AJ Advance and Peerapat Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AJ Advance and Peerapat Technology

0.44

Correlation Coefficient

AJ Advance  Peerapat Technology

Very weak diversification

The 3 months correlation between AJA and Peerapat is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Peerapat Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peerapat Technology and AJ Advance 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 AJ Advance Technology are associated (or correlated) with Peerapat Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peerapat Technology has no effect on the direction of AJ Advance i.e., AJ Advance and Peerapat Technology go up and down completely randomly.

Pair Corralation between AJ Advance and Peerapat Technology

Assuming the 90 days trading horizon AJ Advance Technology is expected to generate 12.55 times more return on investment than Peerapat Technology. However, AJ Advance is 12.55 times more volatile than Peerapat Technology Public. It trades about 0.04 of its potential returns per unit of risk. Peerapat Technology Public is currently generating about 0.02 per unit of risk. If you would invest  20.00  in AJ Advance Technology on September 16, 2024 and sell it today you would lose (4.00) from holding AJ Advance Technology or give up 20.0% of portfolio value over 90 days.

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

AJ Advance Technology  vs.  Peerapat Technology Public

AJ Advance Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AJ Advance Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Peerapat Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peerapat Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Peerapat Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AJ Advance and Peerapat Technology

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

The idea behind AJ Advance Technology and Peerapat Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.