Correlation Between Poya International and President Chain
Can any of the company-specific risk be diversified away by investing in both Poya International and President Chain 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 Poya International and President Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poya International Co and President Chain Store, you can compare the effects of market volatilities on Poya International and President Chain 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 Poya International with a short position of President Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poya International and President Chain.
Diversification Opportunities for Poya International and President Chain
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Poya and President is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Poya International Co and President Chain Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Chain Store and Poya International 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 Poya International Co are associated (or correlated) with President Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Chain Store has no effect on the direction of Poya International i.e., Poya International and President Chain go up and down completely randomly.
Pair Corralation between Poya International and President Chain
Assuming the 90 days trading horizon Poya International Co is not expected to generate positive returns. Moreover, Poya International is 2.51 times more volatile than President Chain Store. It trades away all of its potential returns to assume current level of volatility. President Chain Store is currently generating about 0.01 per unit of risk. If you would invest 26,002 in President Chain Store on November 27, 2024 and sell it today you would earn a total of 698.00 from holding President Chain Store or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Poya International Co vs. President Chain Store
Performance |
| Timeline |
| Poya International |
| President Chain Store |
Poya International and President Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poya International and President Chain
The main advantage of trading using opposite Poya International and President Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poya International position performs unexpectedly, President Chain 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 President Chain will offset losses from the drop in President Chain's long position.| Poya International vs. Taiwan FamilyMart Co | Poya International vs. President Chain Store | Poya International vs. Eclat Textile Co | Poya International vs. Aspeed Technology |
| President Chain vs. Uni President Enterprises Corp | President Chain vs. Formosa Plastics Corp | President Chain vs. Chunghwa Telecom Co | President Chain vs. Fubon Financial Holding |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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