Correlation Between Pontex Polyblend and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Kedge Construction 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 Kedge Construction 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 Kedge Construction Co, you can compare the effects of market volatilities on Pontex Polyblend and Kedge Construction 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 Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Kedge Construction.
Diversification Opportunities for Pontex Polyblend and Kedge Construction
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pontex and Kedge is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction 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 Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Kedge Construction go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Kedge Construction
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 3.12 times more return on investment than Kedge Construction. However, Pontex Polyblend is 3.12 times more volatile than Kedge Construction Co. It trades about 0.13 of its potential returns per unit of risk. Kedge Construction Co is currently generating about 0.16 per unit of risk. If you would invest 2,020 in Pontex Polyblend CoLtd on September 1, 2024 and sell it today you would earn a total of 180.00 from holding Pontex Polyblend CoLtd or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. Kedge Construction Co
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Kedge Construction |
Pontex Polyblend and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Kedge Construction
The main advantage of trading using opposite Pontex Polyblend and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction'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 |
| Kedge Construction vs. BES Engineering Co | Kedge Construction vs. Continental Holdings Corp | Kedge Construction vs. Kee Tai Properties | Kedge Construction vs. Hung Sheng Construction |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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