Correlation Between Pontex Polyblend and Sunspring Metal
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Sunspring Metal 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 Sunspring Metal 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 Sunspring Metal Corp, you can compare the effects of market volatilities on Pontex Polyblend and Sunspring Metal 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 Sunspring Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Sunspring Metal.
Diversification Opportunities for Pontex Polyblend and Sunspring Metal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pontex and Sunspring is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Sunspring Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunspring Metal Corp 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 Sunspring Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunspring Metal Corp has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Sunspring Metal go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Sunspring Metal
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 1.21 times more return on investment than Sunspring Metal. However, Pontex Polyblend is 1.21 times more volatile than Sunspring Metal Corp. It trades about 0.3 of its potential returns per unit of risk. Sunspring Metal Corp is currently generating about 0.0 per unit of risk. If you would invest 2,195 in Pontex Polyblend CoLtd on November 22, 2024 and sell it today you would earn a total of 200.00 from holding Pontex Polyblend CoLtd or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. Sunspring Metal Corp
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Sunspring Metal Corp |
Pontex Polyblend and Sunspring Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Sunspring Metal
The main advantage of trading using opposite Pontex Polyblend and Sunspring Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Sunspring Metal 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 Sunspring Metal will offset losses from the drop in Sunspring Metal's long position.| Pontex Polyblend vs. First Insurance Co | Pontex Polyblend vs. PChome Online | Pontex Polyblend vs. Central Reinsurance Corp | Pontex Polyblend vs. Union Insurance Co |
| Sunspring Metal vs. Makalot Industrial Co | Sunspring Metal vs. Eternal Materials Co | Sunspring Metal vs. Feng Tay Enterprises | Sunspring Metal vs. Taiwan Fu Hsing |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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