Correlation Between San Fu and PCL Technologies
Can any of the company-specific risk be diversified away by investing in both San Fu and PCL Technologies 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 San Fu and PCL Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Fu Chemical and PCL Technologies, you can compare the effects of market volatilities on San Fu and PCL Technologies 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 San Fu with a short position of PCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Fu and PCL Technologies.
Diversification Opportunities for San Fu and PCL Technologies
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between San and PCL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding San Fu Chemical and PCL Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCL Technologies and San Fu 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 San Fu Chemical are associated (or correlated) with PCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCL Technologies has no effect on the direction of San Fu i.e., San Fu and PCL Technologies go up and down completely randomly.
Pair Corralation between San Fu and PCL Technologies
Assuming the 90 days trading horizon San Fu is expected to generate 1.92 times less return on investment than PCL Technologies. But when comparing it to its historical volatility, San Fu Chemical is 1.48 times less risky than PCL Technologies. It trades about 0.1 of its potential returns per unit of risk. PCL Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10,750 in PCL Technologies on September 1, 2024 and sell it today you would earn a total of 1,050 from holding PCL Technologies or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Fu Chemical vs. PCL Technologies
Performance |
| Timeline |
| San Fu Chemical |
| PCL Technologies |
San Fu and PCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Fu and PCL Technologies
The main advantage of trading using opposite San Fu and PCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Fu position performs unexpectedly, PCL Technologies 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 PCL Technologies will offset losses from the drop in PCL Technologies' long position.The idea behind San Fu Chemical and PCL Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PCL Technologies vs. Elan Microelectronics Corp | PCL Technologies vs. Bright Led Electronics | PCL Technologies vs. MediaTek | PCL Technologies vs. Pili International Multimedia |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |