Correlation Between USI Corp and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both USI Corp 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 USI Corp and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USI Corp and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on USI Corp 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 USI Corp with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of USI Corp and Pontex Polyblend.
Diversification Opportunities for USI Corp and Pontex Polyblend
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USI and Pontex is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding USI Corp 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 USI Corp 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 USI Corp 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 USI Corp i.e., USI Corp and Pontex Polyblend go up and down completely randomly.
Pair Corralation between USI Corp and Pontex Polyblend
Assuming the 90 days trading horizon USI Corp is expected to under-perform the Pontex Polyblend. But the stock apears to be less risky and, when comparing its historical volatility, USI Corp is 2.08 times less risky than Pontex Polyblend. The stock trades about -0.2 of its potential returns per unit of risk. The Pontex Polyblend CoLtd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,030 in Pontex Polyblend CoLtd on August 28, 2024 and sell it today you would earn a total of 155.00 from holding Pontex Polyblend CoLtd or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USI Corp vs. Pontex Polyblend CoLtd
Performance |
| Timeline |
| USI Corp |
| Pontex Polyblend CoLtd |
USI Corp and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USI Corp and Pontex Polyblend
The main advantage of trading using opposite USI Corp and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USI Corp 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.| USI Corp vs. Asia Polymer Corp | USI Corp vs. Taiwan Styrene Monomer | USI Corp vs. UPC Technology Corp | USI Corp vs. China Petrochemical Development |
| Pontex Polyblend vs. Cheng Shin Rubber | Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. USI Corp | Pontex Polyblend vs. Asia Polymer Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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