Correlation Between Phison Electronics and PCL Technologies
Can any of the company-specific risk be diversified away by investing in both Phison Electronics and PCL Technologies 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 Phison Electronics and PCL Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phison Electronics and PCL Technologies, you can compare the effects of market volatilities on Phison Electronics and PCL Technologies 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 Phison Electronics with a short position of PCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phison Electronics and PCL Technologies.
Diversification Opportunities for Phison Electronics and PCL Technologies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phison and PCL is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Phison Electronics and PCL Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCL Technologies and Phison Electronics 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 Phison Electronics are associated (or correlated) with PCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCL Technologies has no effect on the direction of Phison Electronics i.e., Phison Electronics and PCL Technologies go up and down completely randomly.
Pair Corralation between Phison Electronics and PCL Technologies
Assuming the 90 days trading horizon Phison Electronics is expected to under-perform the PCL Technologies. In addition to that, Phison Electronics is 1.01 times more volatile than PCL Technologies. It trades about -0.01 of its total potential returns per unit of risk. PCL Technologies is currently generating about 0.25 per unit of volatility. If you would invest 10,450 in PCL Technologies on August 27, 2024 and sell it today you would earn a total of 1,600 from holding PCL Technologies or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phison Electronics vs. PCL Technologies
Performance |
| Timeline |
| Phison Electronics |
| PCL Technologies |
Phison Electronics and PCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phison Electronics and PCL Technologies
The main advantage of trading using opposite Phison Electronics and PCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phison Electronics position performs unexpectedly, PCL Technologies 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 PCL Technologies will offset losses from the drop in PCL Technologies' long position.| Phison Electronics vs. Chung Hwa Food | Phison Electronics vs. Sports Gear Co | Phison Electronics vs. Asia Metal Industries | Phison Electronics vs. Lian Hwa Foods |
| PCL Technologies vs. Phison Electronics | PCL Technologies vs. Transcend Information | PCL Technologies vs. Infortrend Technology | PCL Technologies vs. Promise Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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