Correlation Between PH Tech and SS TECH
Can any of the company-specific risk be diversified away by investing in both PH Tech and SS TECH 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 SS TECH 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 SS TECH, you can compare the effects of market volatilities on PH Tech and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and SS TECH.
Diversification Opportunities for PH Tech and SS TECH
Poor diversification
The 3 months correlation between 239890 and 101490 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of PH Tech i.e., PH Tech and SS TECH go up and down completely randomly.
Pair Corralation between PH Tech and SS TECH
Assuming the 90 days trading horizon PH Tech Co is expected to under-perform the SS TECH. But the stock apears to be less risky and, when comparing its historical volatility, PH Tech Co is 1.03 times less risky than SS TECH. The stock trades about -0.05 of its potential returns per unit of risk. The SS TECH is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,115,487 in SS TECH on November 19, 2024 and sell it today you would earn a total of 24,513 from holding SS TECH or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. SS TECH
Performance |
| Timeline |
| PH Tech |
| SS TECH |
PH Tech and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and SS TECH
The main advantage of trading using opposite PH Tech and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| PH Tech vs. Hannong Chemicals | PH Tech vs. Youngbo Chemical Co | PH Tech vs. Shinhan Inverse Silver | PH Tech vs. Tae Kyung Chemical |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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