Correlation Between Pontex Polyblend and Hua Eng
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Hua Eng 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 Pontex Polyblend and Hua Eng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pontex Polyblend CoLtd and Hua Eng Wire, you can compare the effects of market volatilities on Pontex Polyblend and Hua Eng 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 Pontex Polyblend with a short position of Hua Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Hua Eng.
Diversification Opportunities for Pontex Polyblend and Hua Eng
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pontex and Hua is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Hua Eng Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Eng Wire and Pontex Polyblend 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 Pontex Polyblend CoLtd are associated (or correlated) with Hua Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Eng Wire has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Hua Eng go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Hua Eng
Assuming the 90 days trading horizon Pontex Polyblend is expected to generate 1.16 times less return on investment than Hua Eng. In addition to that, Pontex Polyblend is 1.03 times more volatile than Hua Eng Wire. It trades about 0.06 of its total potential returns per unit of risk. Hua Eng Wire is currently generating about 0.07 per unit of volatility. If you would invest 1,425 in Hua Eng Wire on August 30, 2024 and sell it today you would earn a total of 1,480 from holding Hua Eng Wire or generate 103.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. Hua Eng Wire
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Hua Eng Wire |
Pontex Polyblend and Hua Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Hua Eng
The main advantage of trading using opposite Pontex Polyblend and Hua Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Hua Eng 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 Hua Eng will offset losses from the drop in Hua Eng's long position.| Pontex Polyblend vs. Cheng Shin Rubber | Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. USI Corp | Pontex Polyblend vs. Asia Polymer Corp |
| Hua Eng vs. Walsin Lihwa Corp | Hua Eng vs. Ta Ya Electric | Hua Eng vs. Hong Tai Electric | Hua Eng vs. Sampo Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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