Correlation Between Polytronics Technology and Sporton International
Can any of the company-specific risk be diversified away by investing in both Polytronics Technology and Sporton 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 Polytronics Technology and Sporton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polytronics Technology Corp and Sporton International, you can compare the effects of market volatilities on Polytronics Technology and Sporton 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 Polytronics Technology with a short position of Sporton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polytronics Technology and Sporton International.
Diversification Opportunities for Polytronics Technology and Sporton International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Polytronics and Sporton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Polytronics Technology Corp and Sporton International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporton International and Polytronics 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 Polytronics Technology Corp are associated (or correlated) with Sporton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporton International has no effect on the direction of Polytronics Technology i.e., Polytronics Technology and Sporton International go up and down completely randomly.
Pair Corralation between Polytronics Technology and Sporton International
Assuming the 90 days trading horizon Polytronics Technology Corp is expected to under-perform the Sporton International. In addition to that, Polytronics Technology is 1.74 times more volatile than Sporton International. It trades about -0.22 of its total potential returns per unit of risk. Sporton International is currently generating about -0.13 per unit of volatility. If you would invest 21,200 in Sporton International on September 1, 2024 and sell it today you would lose (850.00) from holding Sporton International or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polytronics Technology Corp vs. Sporton International
Performance |
| Timeline |
| Polytronics Technology |
| Sporton International |
Polytronics Technology and Sporton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polytronics Technology and Sporton International
The main advantage of trading using opposite Polytronics Technology and Sporton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polytronics Technology position performs unexpectedly, Sporton 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 Sporton International will offset losses from the drop in Sporton International's long position.| Polytronics Technology vs. Thinking Electronic Industrial | Polytronics Technology vs. Amazing Microelectronic | Polytronics Technology vs. Cleanaway Co | Polytronics Technology vs. Wah Lee Industrial |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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