Correlation Between SanDi Properties and Pou Chen
Can any of the company-specific risk be diversified away by investing in both SanDi Properties and Pou Chen 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 SanDi Properties and Pou Chen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SanDi Properties Co and Pou Chen Corp, you can compare the effects of market volatilities on SanDi Properties and Pou Chen 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 SanDi Properties with a short position of Pou Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SanDi Properties and Pou Chen.
Diversification Opportunities for SanDi Properties and Pou Chen
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SanDi and Pou is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SanDi Properties Co and Pou Chen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pou Chen Corp and SanDi Properties 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 SanDi Properties Co are associated (or correlated) with Pou Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pou Chen Corp has no effect on the direction of SanDi Properties i.e., SanDi Properties and Pou Chen go up and down completely randomly.
Pair Corralation between SanDi Properties and Pou Chen
Assuming the 90 days trading horizon SanDi Properties Co is expected to under-perform the Pou Chen. In addition to that, SanDi Properties is 1.53 times more volatile than Pou Chen Corp. It trades about -0.17 of its total potential returns per unit of risk. Pou Chen Corp is currently generating about 0.38 per unit of volatility. If you would invest 3,755 in Pou Chen Corp on August 24, 2024 and sell it today you would earn a total of 615.00 from holding Pou Chen Corp or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SanDi Properties Co vs. Pou Chen Corp
Performance |
| Timeline |
| SanDi Properties |
| Pou Chen Corp |
SanDi Properties and Pou Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SanDi Properties and Pou Chen
The main advantage of trading using opposite SanDi Properties and Pou Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SanDi Properties position performs unexpectedly, Pou Chen 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 Pou Chen will offset losses from the drop in Pou Chen's long position.| SanDi Properties vs. Sunny Friend Environmental | SanDi Properties vs. Taiwan Secom Co | SanDi Properties vs. TTET Union Corp | SanDi Properties vs. ECOVE Environment Corp |
| Pou Chen vs. Uni President Enterprises Corp | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Far Eastern New | Pou Chen vs. Formosa Chemicals Fibre |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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