Correlation Between Asia Pacific and Post

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

By analyzing existing cross correlation between Asia Pacific Investment and Post and Telecommunications, you can compare the effects of market volatilities on Asia Pacific and Post 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 Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Post.

Diversification Opportunities for Asia Pacific and Post

0.21

Correlation Coefficient

Asia Pacific  Post

Modest diversification

The 3 months correlation between Asia and Post is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Investment and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni 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 Investment are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Asia Pacific i.e., Asia Pacific and Post go up and down completely randomly.

Pair Corralation between Asia Pacific and Post

Assuming the 90 days trading horizon Asia Pacific Investment is expected to generate 2.02 times more return on investment than Post. However, Asia Pacific is 2.02 times more volatile than Post and Telecommunications. It trades about 0.03 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.01 per unit of risk. If you would invest  700,000  in Asia Pacific Investment on March 26, 2025 and sell it today you would earn a total of  20,000  from holding Asia Pacific Investment or generate 2.86% return on investment over 90 days.

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

Asia Pacific Investment  vs.  Post and Telecommunications

Asia Pacific Investment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pacific Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Asia Pacific may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Post and Telecommuni

Risk-Adjusted Performance

Very Weak

Over the last 90 days Post and Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Post is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Asia Pacific and Post

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

The idea behind Asia Pacific Investment and Post and Telecommunications 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.