Correlation Between PCL Technologies and Sanyang
Can any of the company-specific risk be diversified away by investing in both PCL Technologies and Sanyang 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 PCL Technologies and Sanyang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCL Technologies and Sanyang Motor Co, you can compare the effects of market volatilities on PCL Technologies and Sanyang 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 PCL Technologies with a short position of Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCL Technologies and Sanyang.
Diversification Opportunities for PCL Technologies and Sanyang
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PCL and Sanyang is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PCL Technologies and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor and PCL Technologies 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 PCL Technologies are associated (or correlated) with Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of PCL Technologies i.e., PCL Technologies and Sanyang go up and down completely randomly.
Pair Corralation between PCL Technologies and Sanyang
Assuming the 90 days trading horizon PCL Technologies is expected to generate 2.31 times more return on investment than Sanyang. However, PCL Technologies is 2.31 times more volatile than Sanyang Motor Co. It trades about 0.25 of its potential returns per unit of risk. Sanyang Motor Co is currently generating about 0.13 per unit of risk. If you would invest 10,450 in PCL Technologies on August 27, 2024 and sell it today you would earn a total of 1,600 from holding PCL Technologies or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCL Technologies vs. Sanyang Motor Co
Performance |
| Timeline |
| PCL Technologies |
| Sanyang Motor |
PCL Technologies and Sanyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCL Technologies and Sanyang
The main advantage of trading using opposite PCL Technologies and Sanyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCL Technologies position performs unexpectedly, Sanyang 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 Sanyang will offset losses from the drop in Sanyang's long position.| PCL Technologies vs. Phison Electronics | PCL Technologies vs. Transcend Information | PCL Technologies vs. Infortrend Technology | PCL Technologies vs. Promise Technology |
| Sanyang vs. Taiwan Semiconductor Manufacturing | Sanyang vs. Hon Hai Precision | Sanyang vs. MediaTek | Sanyang vs. Chunghwa Telecom 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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