Correlation Between As Commercial and Public Power

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

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

Diversification Opportunities for As Commercial and Public Power

0.78

Correlation Coefficient

As Commercial  Public Power

Poor diversification

The 3 months correlation between ASCO and Public is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding As Commercial Industrial and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and As Commercial 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 As Commercial Industrial are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of As Commercial i.e., As Commercial and Public Power go up and down completely randomly.

Pair Corralation between As Commercial and Public Power

Assuming the 90 days trading horizon As Commercial Industrial is expected to generate 1.07 times more return on investment than Public Power. However, As Commercial is 1.07 times more volatile than Public Power. It trades about 0.14 of its potential returns per unit of risk. Public Power is currently generating about 0.1 per unit of risk. If you would invest  330.00  in As Commercial Industrial on April 24, 2025 and sell it today you would earn a total of  39.00  from holding As Commercial Industrial or generate 11.82% return on investment over 90 days.

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

As Commercial Industrial  vs.  Public Power

As Commercial Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in As Commercial Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, As Commercial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Public Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with As Commercial and Public Power

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

The idea behind As Commercial Industrial and Public Power 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.