Correlation Between CBAK Energy and Asia Pacific

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

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

Diversification Opportunities for CBAK Energy and Asia Pacific

-0.02

Correlation Coefficient

CBAK Energy  Asia Pacific

Good diversification

The 3 months correlation between CBAK and Asia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Asia Pacific Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Wire and CBAK Energy 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 CBAK Energy Technology 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 Wire has no effect on the direction of CBAK Energy i.e., CBAK Energy and Asia Pacific go up and down completely randomly.

Pair Corralation between CBAK Energy and Asia Pacific

Given the investment horizon of 90 days CBAK Energy Technology is expected to under-perform the Asia Pacific. In addition to that, CBAK Energy is 1.67 times more volatile than Asia Pacific Wire. It trades about -0.05 of its total potential returns per unit of risk. Asia Pacific Wire is currently generating about 0.03 per unit of volatility. If you would invest  137.00  in Asia Pacific Wire on January 20, 2024 and sell it today you would earn a total of  1.00  from holding Asia Pacific Wire or generate 0.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

CBAK Energy Technology  vs.  Asia Pacific Wire

CBAK Energy Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBAK Energy Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Asia Pacific Wire

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pacific Wire has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asia Pacific is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CBAK Energy and Asia Pacific

The main advantage of trading using opposite CBAK Energy and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy 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 CBAK Energy Technology and Asia Pacific Wire 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.