Correlation Between PH Tech and ABCO Electronics
Can any of the company-specific risk be diversified away by investing in both PH Tech and ABCO Electronics 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 PH Tech and ABCO Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and ABCO Electronics Co, you can compare the effects of market volatilities on PH Tech and ABCO Electronics 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 PH Tech with a short position of ABCO Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and ABCO Electronics.
Diversification Opportunities for PH Tech and ABCO Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 239890 and ABCO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and ABCO Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Electronics and PH Tech 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 PH Tech Co are associated (or correlated) with ABCO Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Electronics has no effect on the direction of PH Tech i.e., PH Tech and ABCO Electronics go up and down completely randomly.
Pair Corralation between PH Tech and ABCO Electronics
Assuming the 90 days trading horizon PH Tech Co is expected to generate 1.44 times more return on investment than ABCO Electronics. However, PH Tech is 1.44 times more volatile than ABCO Electronics Co. It trades about 0.21 of its potential returns per unit of risk. ABCO Electronics Co is currently generating about -0.12 per unit of risk. If you would invest 700,000 in PH Tech Co on August 29, 2024 and sell it today you would earn a total of 135,000 from holding PH Tech Co or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. ABCO Electronics Co
Performance |
| Timeline |
| PH Tech |
| ABCO Electronics |
PH Tech and ABCO Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and ABCO Electronics
The main advantage of trading using opposite PH Tech and ABCO Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, ABCO Electronics 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 ABCO Electronics will offset losses from the drop in ABCO Electronics' long position.| PH Tech vs. SBI Investment KOREA | PH Tech vs. Sam Yang Foods | PH Tech vs. Hyundai Green Food | PH Tech vs. E Investment Development |
| ABCO Electronics vs. Korea Real Estate | ABCO Electronics vs. Korea Ratings Co | ABCO Electronics vs. IQuest Co | ABCO Electronics vs. Wonbang Tech Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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