Correlation Between Pantech Group and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Pantech Group and Alliance Financial 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 Pantech Group and Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantech Group Holdings and Alliance Financial Group, you can compare the effects of market volatilities on Pantech Group and Alliance Financial 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 Pantech Group with a short position of Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantech Group and Alliance Financial.
Diversification Opportunities for Pantech Group and Alliance Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pantech and Alliance is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Pantech Group Holdings and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial and Pantech Group 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 Pantech Group Holdings are associated (or correlated) with Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Pantech Group i.e., Pantech Group and Alliance Financial go up and down completely randomly.
Pair Corralation between Pantech Group and Alliance Financial
Assuming the 90 days trading horizon Pantech Group is expected to generate 1.17 times less return on investment than Alliance Financial. In addition to that, Pantech Group is 1.39 times more volatile than Alliance Financial Group. It trades about 0.08 of its total potential returns per unit of risk. Alliance Financial Group is currently generating about 0.12 per unit of volatility. If you would invest 308.00 in Alliance Financial Group on September 2, 2024 and sell it today you would earn a total of 183.00 from holding Alliance Financial Group or generate 59.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantech Group Holdings vs. Alliance Financial Group
Performance |
| Timeline |
| Pantech Group Holdings |
| Alliance Financial |
Pantech Group and Alliance Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantech Group and Alliance Financial
The main advantage of trading using opposite Pantech Group and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantech Group position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.The idea behind Pantech Group Holdings and Alliance Financial Group 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.| Alliance Financial vs. Aeon Credit Service | Alliance Financial vs. Digistar Bhd | Alliance Financial vs. Minetech Resources Bhd | Alliance Financial vs. Swift Haulage Bhd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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