Correlation Between Voksel Electric and Asia Pacific

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

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

Diversification Opportunities for Voksel Electric and Asia Pacific

-0.55

Correlation Coefficient

Voksel Electric  Asia Pacific

Excellent diversification

The 3 months correlation between Voksel and Asia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Voksel Electric Tbk and Asia Pacific Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investama and Voksel Electric 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 Voksel Electric Tbk 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 Investama has no effect on the direction of Voksel Electric i.e., Voksel Electric and Asia Pacific go up and down completely randomly.

Pair Corralation between Voksel Electric and Asia Pacific

Assuming the 90 days trading horizon Voksel Electric Tbk is expected to generate 1.1 times more return on investment than Asia Pacific. However, Voksel Electric is 1.1 times more volatile than Asia Pacific Investama. It trades about 0.04 of its potential returns per unit of risk. Asia Pacific Investama is currently generating about -0.02 per unit of risk. If you would invest  19,600  in Voksel Electric Tbk on September 12, 2024 and sell it today you would earn a total of  4,800  from holding Voksel Electric Tbk or generate 24.49% return on investment over 90 days.

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

Voksel Electric Tbk  vs.  Asia Pacific Investama

Voksel Electric Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voksel Electric Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Voksel Electric may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Voksel Electric and Asia Pacific

The main advantage of trading using opposite Voksel Electric and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voksel Electric 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 Voksel Electric Tbk and Asia Pacific Investama 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.