Correlation Between Powertech Industrial and Coxon Precise
Can any of the company-specific risk be diversified away by investing in both Powertech Industrial and Coxon Precise 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 Powertech Industrial and Coxon Precise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powertech Industrial Co and Coxon Precise Industrial, you can compare the effects of market volatilities on Powertech Industrial and Coxon Precise 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 Powertech Industrial with a short position of Coxon Precise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powertech Industrial and Coxon Precise.
Diversification Opportunities for Powertech Industrial and Coxon Precise
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Powertech and Coxon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Industrial Co and Coxon Precise Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coxon Precise Industrial and Powertech Industrial 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 Powertech Industrial Co are associated (or correlated) with Coxon Precise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coxon Precise Industrial has no effect on the direction of Powertech Industrial i.e., Powertech Industrial and Coxon Precise go up and down completely randomly.
Pair Corralation between Powertech Industrial and Coxon Precise
Assuming the 90 days trading horizon Powertech Industrial Co is expected to generate 1.0 times more return on investment than Coxon Precise. However, Powertech Industrial Co is 1.0 times less risky than Coxon Precise. It trades about 0.08 of its potential returns per unit of risk. Coxon Precise Industrial is currently generating about 0.01 per unit of risk. If you would invest 2,380 in Powertech Industrial Co on September 1, 2024 and sell it today you would earn a total of 705.00 from holding Powertech Industrial Co or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powertech Industrial Co vs. Coxon Precise Industrial
Performance |
| Timeline |
| Powertech Industrial |
| Coxon Precise Industrial |
Powertech Industrial and Coxon Precise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powertech Industrial and Coxon Precise
The main advantage of trading using opposite Powertech Industrial and Coxon Precise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powertech Industrial position performs unexpectedly, Coxon Precise 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 Coxon Precise will offset losses from the drop in Coxon Precise's long position.| Powertech Industrial vs. BES Engineering Co | Powertech Industrial vs. Continental Holdings Corp | Powertech Industrial vs. Kee Tai Properties | Powertech Industrial vs. Hung Sheng Construction |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |