Correlation Between Oriental Food and Pantech Group
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Pantech Group 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 Oriental Food and Pantech Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and Pantech Group Holdings, you can compare the effects of market volatilities on Oriental Food and Pantech Group 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 Oriental Food with a short position of Pantech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Pantech Group.
Diversification Opportunities for Oriental Food and Pantech Group
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oriental and Pantech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Pantech Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantech Group Holdings and Oriental Food 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 Oriental Food Industries are associated (or correlated) with Pantech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantech Group Holdings has no effect on the direction of Oriental Food i.e., Oriental Food and Pantech Group go up and down completely randomly.
Pair Corralation between Oriental Food and Pantech Group
Assuming the 90 days trading horizon Oriental Food Industries is expected to generate 2.23 times more return on investment than Pantech Group. However, Oriental Food is 2.23 times more volatile than Pantech Group Holdings. It trades about -0.05 of its potential returns per unit of risk. Pantech Group Holdings is currently generating about -0.16 per unit of risk. If you would invest 164.00 in Oriental Food Industries on November 1, 2024 and sell it today you would lose (4.00) from holding Oriental Food Industries or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Food Industries vs. Pantech Group Holdings
Performance |
| Timeline |
| Oriental Food Industries |
| Pantech Group Holdings |
Oriental Food and Pantech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Pantech Group
The main advantage of trading using opposite Oriental Food and Pantech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Pantech Group 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 Pantech Group will offset losses from the drop in Pantech Group's long position.| Oriental Food vs. Binasat Communications Bhd | Oriental Food vs. Press Metal Bhd | Oriental Food vs. Central Industrial Corp | Oriental Food vs. Lotte Chemical Titan |
| Pantech Group vs. Sungei Bagan Rubber | Pantech Group vs. Hong Leong Bank | Pantech Group vs. Uchi Technologies Bhd | Pantech Group vs. Oriental Food Industries |
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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