Correlation Between POSBO UNSPADRS/20YC1 and Postal Savings
Can any of the company-specific risk be diversified away by investing in both POSBO UNSPADRS/20YC1 and Postal Savings 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 POSBO UNSPADRS/20YC1 and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSBO UNSPADRS20YC1 and Postal Savings Bank, you can compare the effects of market volatilities on POSBO UNSPADRS/20YC1 and Postal Savings 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 POSBO UNSPADRS/20YC1 with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSBO UNSPADRS/20YC1 and Postal Savings.
Diversification Opportunities for POSBO UNSPADRS/20YC1 and Postal Savings
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between POSBO and Postal is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding POSBO UNSPADRS20YC1 and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS20YC1 are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of POSBO UNSPADRS/20YC1 i.e., POSBO UNSPADRS/20YC1 and Postal Savings go up and down completely randomly.
Pair Corralation between POSBO UNSPADRS/20YC1 and Postal Savings
Assuming the 90 days trading horizon POSBO UNSPADRS/20YC1 is expected to generate 12.91 times less return on investment than Postal Savings. But when comparing it to its historical volatility, POSBO UNSPADRS20YC1 is 3.74 times less risky than Postal Savings. It trades about 0.03 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8.11 in Postal Savings Bank on September 1, 2024 and sell it today you would earn a total of 44.89 from holding Postal Savings Bank or generate 553.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSBO UNSPADRS20YC1 vs. Postal Savings Bank
Performance |
| Timeline |
| POSBO UNSPADRS/20YC1 |
| Postal Savings Bank |
POSBO UNSPADRS/20YC1 and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSBO UNSPADRS/20YC1 and Postal Savings
The main advantage of trading using opposite POSBO UNSPADRS/20YC1 and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSBO UNSPADRS/20YC1 position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| POSBO UNSPADRS/20YC1 vs. Check Point Software | POSBO UNSPADRS/20YC1 vs. MAGIC SOFTWARE ENTR | POSBO UNSPADRS/20YC1 vs. FUYO GENERAL LEASE | POSBO UNSPADRS/20YC1 vs. FANDIFI TECHNOLOGY P |
| Postal Savings vs. PLAYTIKA HOLDING DL 01 | Postal Savings vs. INDOFOOD AGRI RES | Postal Savings vs. JJ SNACK FOODS | Postal Savings vs. KOOL2PLAY SA ZY |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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