Correlation Between Posiflex Technology and Polytronics Technology
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Polytronics 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 Posiflex Technology and Polytronics Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Polytronics Technology Corp, you can compare the effects of market volatilities on Posiflex Technology and Polytronics 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 Posiflex Technology with a short position of Polytronics Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Polytronics Technology.
Diversification Opportunities for Posiflex Technology and Polytronics Technology
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Posiflex and Polytronics is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Polytronics Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polytronics Technology and Posiflex 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 Posiflex Technology are associated (or correlated) with Polytronics Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polytronics Technology has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Polytronics Technology go up and down completely randomly.
Pair Corralation between Posiflex Technology and Polytronics Technology
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 1.04 times more return on investment than Polytronics Technology. However, Posiflex Technology is 1.04 times more volatile than Polytronics Technology Corp. It trades about 0.23 of its potential returns per unit of risk. Polytronics Technology Corp is currently generating about 0.04 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Polytronics Technology Corp
Performance |
| Timeline |
| Posiflex Technology |
| Polytronics Technology |
Posiflex Technology and Polytronics Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Polytronics Technology
The main advantage of trading using opposite Posiflex Technology and Polytronics Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Polytronics 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 Polytronics Technology will offset losses from the drop in Polytronics Technology's long position.The idea behind Posiflex Technology and Polytronics Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |