Correlation Between Tehmag Foods and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Pontex Polyblend 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 Tehmag Foods and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Tehmag Foods and Pontex Polyblend 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 Tehmag Foods with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Pontex Polyblend.
Diversification Opportunities for Tehmag Foods and Pontex Polyblend
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tehmag and Pontex is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Tehmag Foods 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 Tehmag Foods are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Pontex Polyblend go up and down completely randomly.
Pair Corralation between Tehmag Foods and Pontex Polyblend
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.22 times more return on investment than Pontex Polyblend. However, Tehmag Foods is 4.47 times less risky than Pontex Polyblend. It trades about 0.28 of its potential returns per unit of risk. Pontex Polyblend CoLtd is currently generating about 0.0 per unit of risk. If you would invest 30,550 in Tehmag Foods on October 12, 2024 and sell it today you would earn a total of 1,050 from holding Tehmag Foods or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Pontex Polyblend CoLtd
Performance |
| Timeline |
| Tehmag Foods |
| Pontex Polyblend CoLtd |
Tehmag Foods and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Pontex Polyblend
The main advantage of trading using opposite Tehmag Foods and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Pontex Polyblend 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 Pontex Polyblend will offset losses from the drop in Pontex Polyblend's long position.| Tehmag Foods vs. DingZing Advanced Materials | Tehmag Foods vs. Grand Plastic Technology | Tehmag Foods vs. Hwa Fong Rubber | Tehmag Foods vs. ThinTech Materials Technology |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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