Correlation Between CHINA DEVELOPMENT and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both CHINA DEVELOPMENT 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 CHINA DEVELOPMENT and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA DEVELOPMENT FINANCIAL and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on CHINA DEVELOPMENT 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 CHINA DEVELOPMENT with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA DEVELOPMENT and Pontex Polyblend.
Diversification Opportunities for CHINA DEVELOPMENT and Pontex Polyblend
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and Pontex is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL 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 CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL 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 CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and Pontex Polyblend go up and down completely randomly.
Pair Corralation between CHINA DEVELOPMENT and Pontex Polyblend
Assuming the 90 days trading horizon CHINA DEVELOPMENT is expected to generate 10.56 times less return on investment than Pontex Polyblend. But when comparing it to its historical volatility, CHINA DEVELOPMENT FINANCIAL is 16.78 times less risky than Pontex Polyblend. It trades about 0.41 of its potential returns per unit of risk. Pontex Polyblend CoLtd is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,015 in Pontex Polyblend CoLtd on October 25, 2024 and sell it today you would earn a total of 275.00 from holding Pontex Polyblend CoLtd or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA DEVELOPMENT FINANCIAL vs. Pontex Polyblend CoLtd
Performance |
| Timeline |
| CHINA DEVELOPMENT |
| Pontex Polyblend CoLtd |
CHINA DEVELOPMENT and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA DEVELOPMENT and Pontex Polyblend
The main advantage of trading using opposite CHINA DEVELOPMENT and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA DEVELOPMENT 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.| CHINA DEVELOPMENT vs. Eastern Media International | CHINA DEVELOPMENT vs. GameSparcs Co | CHINA DEVELOPMENT vs. Formosa International Hotels | CHINA DEVELOPMENT vs. Hotel Holiday Garden |
| Pontex Polyblend vs. Mosa Industrial Corp | Pontex Polyblend vs. Sunspring Metal Corp | Pontex Polyblend vs. Posiflex Technology | Pontex Polyblend vs. Asmedia Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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