Correlation Between PChome Online and Sunfar Computer
Can any of the company-specific risk be diversified away by investing in both PChome Online and Sunfar Computer 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 PChome Online and Sunfar Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Sunfar Computer Co, you can compare the effects of market volatilities on PChome Online and Sunfar Computer 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 PChome Online with a short position of Sunfar Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Sunfar Computer.
Diversification Opportunities for PChome Online and Sunfar Computer
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PChome and Sunfar is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Sunfar Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfar Computer and PChome Online 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 PChome Online are associated (or correlated) with Sunfar Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfar Computer has no effect on the direction of PChome Online i.e., PChome Online and Sunfar Computer go up and down completely randomly.
Pair Corralation between PChome Online and Sunfar Computer
Assuming the 90 days trading horizon PChome Online is expected to generate 7.6 times more return on investment than Sunfar Computer. However, PChome Online is 7.6 times more volatile than Sunfar Computer Co. It trades about 0.25 of its potential returns per unit of risk. Sunfar Computer Co is currently generating about 0.02 per unit of risk. If you would invest 2,965 in PChome Online on September 12, 2024 and sell it today you would earn a total of 2,405 from holding PChome Online or generate 81.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Sunfar Computer Co
Performance |
| Timeline |
| PChome Online |
| Sunfar Computer |
PChome Online and Sunfar Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Sunfar Computer
The main advantage of trading using opposite PChome Online and Sunfar Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Sunfar Computer 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 Sunfar Computer will offset losses from the drop in Sunfar Computer's long position.| PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Eclat Textile Co | PChome Online vs. Ruentex Development Co |
| Sunfar Computer vs. Auras Technology Co | Sunfar Computer vs. Forcecon Technology Co | Sunfar Computer vs. TUL Corporation | Sunfar Computer vs. Space Shuttle Hi Tech |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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