Correlation Between Chailease Holding and Poya International
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Poya International 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 Chailease Holding and Poya International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chailease Holding Co and Poya International Co, you can compare the effects of market volatilities on Chailease Holding and Poya International 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 Chailease Holding with a short position of Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Poya International.
Diversification Opportunities for Chailease Holding and Poya International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chailease and Poya is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Chailease Holding i.e., Chailease Holding and Poya International go up and down completely randomly.
Pair Corralation between Chailease Holding and Poya International
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Poya International. But the stock apears to be less risky and, when comparing its historical volatility, Chailease Holding Co is 1.25 times less risky than Poya International. The stock trades about -0.05 of its potential returns per unit of risk. The Poya International Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 42,205 in Poya International Co on September 2, 2024 and sell it today you would earn a total of 5,695 from holding Poya International Co or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chailease Holding Co vs. Poya International Co
Performance |
| Timeline |
| Chailease Holding |
| Poya International |
Chailease Holding and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Poya International
The main advantage of trading using opposite Chailease Holding and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Poya International 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 Poya International will offset losses from the drop in Poya International's long position.The idea behind Chailease Holding Co and Poya International Co 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.| Poya International vs. Chaintech Technology Corp | Poya International vs. Avision | Poya International vs. Clevo Co | Poya International vs. Elitegroup Computer Systems |
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 Directory module to find actively traded commodities issued by global exchanges.
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