Correlation Between AAPICO Hitech and Inoue Rubber

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

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

Diversification Opportunities for AAPICO Hitech and Inoue Rubber

-0.11

Correlation Coefficient

AAPICO Hitech  Inoue Rubber

Good diversification

The 3 months correlation between AAPICO and Inoue is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and Inoue Rubber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inoue Rubber Public and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with Inoue Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inoue Rubber Public has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and Inoue Rubber go up and down completely randomly.

Pair Corralation between AAPICO Hitech and Inoue Rubber

Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 1.95 times more return on investment than Inoue Rubber. However, AAPICO Hitech is 1.95 times more volatile than Inoue Rubber Public. It trades about 0.18 of its potential returns per unit of risk. Inoue Rubber Public is currently generating about 0.01 per unit of risk. If you would invest  1,170  in AAPICO Hitech Public on April 22, 2025 and sell it today you would earn a total of  280.00  from holding AAPICO Hitech Public or generate 23.93% return on investment over 90 days.

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

AAPICO Hitech Public  vs.  Inoue Rubber Public

AAPICO Hitech Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAPICO Hitech Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, AAPICO Hitech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Inoue Rubber Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inoue Rubber Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Inoue Rubber is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AAPICO Hitech and Inoue Rubber

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

The idea behind AAPICO Hitech Public and Inoue Rubber 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 CEOs Directory module to screen CEOs from public companies around the world.