Correlation Between Grand Plastic and Para Light
Can any of the company-specific risk be diversified away by investing in both Grand Plastic and Para Light 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 Grand Plastic and Para Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Plastic Technology and Para Light Electronics, you can compare the effects of market volatilities on Grand Plastic and Para Light 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 Grand Plastic with a short position of Para Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Plastic and Para Light.
Diversification Opportunities for Grand Plastic and Para Light
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grand and Para is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Grand Plastic Technology and Para Light Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Para Light Electronics and Grand Plastic 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 Grand Plastic Technology are associated (or correlated) with Para Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Para Light Electronics has no effect on the direction of Grand Plastic i.e., Grand Plastic and Para Light go up and down completely randomly.
Pair Corralation between Grand Plastic and Para Light
Assuming the 90 days trading horizon Grand Plastic Technology is expected to generate 2.57 times more return on investment than Para Light. However, Grand Plastic is 2.57 times more volatile than Para Light Electronics. It trades about 0.11 of its potential returns per unit of risk. Para Light Electronics is currently generating about -0.22 per unit of risk. If you would invest 156,000 in Grand Plastic Technology on August 30, 2024 and sell it today you would earn a total of 8,500 from holding Grand Plastic Technology or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Plastic Technology vs. Para Light Electronics
Performance |
| Timeline |
| Grand Plastic Technology |
| Para Light Electronics |
Grand Plastic and Para Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Plastic and Para Light
The main advantage of trading using opposite Grand Plastic and Para Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Plastic position performs unexpectedly, Para Light 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 Para Light will offset losses from the drop in Para Light's long position.| Grand Plastic vs. Yieh United Steel | Grand Plastic vs. PlayNitride | Grand Plastic vs. Yeou Yih Steel | Grand Plastic vs. Chung Hung Steel |
| Para Light vs. Harvatek Corp | Para Light vs. Bright Led Electronics | Para Light vs. Ledtech Electronics Corp | Para Light vs. Everlight Electronics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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