Correlation Between Asia Pacific and Voksel Electric

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

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

Diversification Opportunities for Asia Pacific and Voksel Electric

-0.61

Correlation Coefficient

Asia Pacific  Voksel Electric

Excellent diversification

The 3 months correlation between Asia and Voksel is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Investama and Voksel Electric Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voksel Electric Tbk and Asia Pacific 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 Asia Pacific Investama are associated (or correlated) with Voksel Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voksel Electric Tbk has no effect on the direction of Asia Pacific i.e., Asia Pacific and Voksel Electric go up and down completely randomly.

Pair Corralation between Asia Pacific and Voksel Electric

Assuming the 90 days trading horizon Asia Pacific Investama is expected to under-perform the Voksel Electric. But the stock apears to be less risky and, when comparing its historical volatility, Asia Pacific Investama is 2.61 times less risky than Voksel Electric. The stock trades about 0.0 of its potential returns per unit of risk. The Voksel Electric Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  24,400  in Voksel Electric Tbk on September 13, 2024 and sell it today you would lose (400.00) from holding Voksel Electric Tbk or give up 1.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Asia Pacific Investama  vs.  Voksel Electric Tbk

Asia Pacific Investama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pacific Investama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asia Pacific is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Voksel Electric Tbk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voksel Electric Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Voksel Electric disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asia Pacific and Voksel Electric

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

The idea behind Asia Pacific Investama and Voksel Electric Tbk 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.

Check out your portfolio center.

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.