Correlation Between Planet Technology and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both Planet Technology and Posiflex Technology 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 Planet Technology and Posiflex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Technology and Posiflex Technology, you can compare the effects of market volatilities on Planet Technology and Posiflex Technology 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 Planet Technology with a short position of Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Technology and Posiflex Technology.
Diversification Opportunities for Planet Technology and Posiflex Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Planet and Posiflex is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Planet Technology and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex Technology and Planet 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 Planet Technology are associated (or correlated) with Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of Planet Technology i.e., Planet Technology and Posiflex Technology go up and down completely randomly.
Pair Corralation between Planet Technology and Posiflex Technology
Assuming the 90 days trading horizon Planet Technology is expected to under-perform the Posiflex Technology. But the stock apears to be less risky and, when comparing its historical volatility, Planet Technology is 1.36 times less risky than Posiflex Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Posiflex Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 13,350 in Posiflex Technology on September 1, 2024 and sell it today you would earn a total of 17,700 from holding Posiflex Technology or generate 132.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Planet Technology vs. Posiflex Technology
Performance |
| Timeline |
| Planet Technology |
| Posiflex Technology |
Planet Technology and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Technology and Posiflex Technology
The main advantage of trading using opposite Planet Technology and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Technology position performs unexpectedly, Posiflex Technology 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 Posiflex Technology will offset losses from the drop in Posiflex Technology's long position.| Planet Technology vs. Accton Technology Corp | Planet Technology vs. HTC Corp | Planet Technology vs. Wistron NeWeb Corp | Planet Technology vs. Arcadyan Technology Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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