Correlation Between Generalplus Technology and PCL Technologies
Can any of the company-specific risk be diversified away by investing in both Generalplus Technology 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 Generalplus Technology and PCL Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generalplus Technology and PCL Technologies, you can compare the effects of market volatilities on Generalplus Technology 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 Generalplus Technology with a short position of PCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generalplus Technology and PCL Technologies.
Diversification Opportunities for Generalplus Technology and PCL Technologies
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Generalplus and PCL is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Generalplus Technology and PCL Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCL Technologies and Generalplus Technology 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 Generalplus Technology 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 Generalplus Technology i.e., Generalplus Technology and PCL Technologies go up and down completely randomly.
Pair Corralation between Generalplus Technology and PCL Technologies
Assuming the 90 days trading horizon Generalplus Technology is expected to generate 2.14 times less return on investment than PCL Technologies. But when comparing it to its historical volatility, Generalplus Technology is 1.47 times less risky than PCL Technologies. It trades about 0.02 of its potential returns per unit of risk. PCL Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,504 in PCL Technologies on September 1, 2024 and sell it today you would earn a total of 1,296 from holding PCL Technologies or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Generalplus Technology vs. PCL Technologies
Performance |
| Timeline |
| Generalplus Technology |
| PCL Technologies |
Generalplus Technology and PCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generalplus Technology and PCL Technologies
The main advantage of trading using opposite Generalplus Technology and PCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generalplus Technology 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.| Generalplus Technology vs. United Microelectronics | Generalplus Technology vs. Winbond Electronics Corp |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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