Correlation Between PChome Online and Galaxy Software
Can any of the company-specific risk be diversified away by investing in both PChome Online and Galaxy Software 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 Galaxy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Galaxy Software Services, you can compare the effects of market volatilities on PChome Online and Galaxy Software 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 Galaxy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Galaxy Software.
Diversification Opportunities for PChome Online and Galaxy Software
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PChome and Galaxy is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Galaxy Software Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Software Services 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 Galaxy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Software Services has no effect on the direction of PChome Online i.e., PChome Online and Galaxy Software go up and down completely randomly.
Pair Corralation between PChome Online and Galaxy Software
Assuming the 90 days trading horizon PChome Online is expected to generate 2.44 times more return on investment than Galaxy Software. However, PChome Online is 2.44 times more volatile than Galaxy Software Services. It trades about 0.21 of its potential returns per unit of risk. Galaxy Software Services is currently generating about -0.01 per unit of risk. If you would invest 4,215 in PChome Online on August 29, 2024 and sell it today you would earn a total of 1,095 from holding PChome Online or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Galaxy Software Services
Performance |
| Timeline |
| PChome Online |
| Galaxy Software Services |
PChome Online and Galaxy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Galaxy Software
The main advantage of trading using opposite PChome Online and Galaxy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Galaxy Software 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 Galaxy Software will offset losses from the drop in Galaxy Software's long position.| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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