Correlation Between Pontex Polyblend and Yummy Town
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Yummy Town 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 Yummy Town 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 Yummy Town Cayman, you can compare the effects of market volatilities on Pontex Polyblend and Yummy Town 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 Yummy Town. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Yummy Town.
Diversification Opportunities for Pontex Polyblend and Yummy Town
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pontex and Yummy is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Yummy Town Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yummy Town Cayman 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 Yummy Town. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yummy Town Cayman has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Yummy Town go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Yummy Town
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 2.36 times more return on investment than Yummy Town. However, Pontex Polyblend is 2.36 times more volatile than Yummy Town Cayman. It trades about 0.12 of its potential returns per unit of risk. Yummy Town Cayman is currently generating about -0.15 per unit of risk. If you would invest 2,020 in Pontex Polyblend CoLtd on August 31, 2024 and sell it today you would earn a total of 170.00 from holding Pontex Polyblend CoLtd or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. Yummy Town Cayman
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Yummy Town Cayman |
Pontex Polyblend and Yummy Town Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Yummy Town
The main advantage of trading using opposite Pontex Polyblend and Yummy Town positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Yummy Town 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 Yummy Town will offset losses from the drop in Yummy Town'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 |
| Yummy Town vs. V Tac Technology Co | Yummy Town vs. Pontex Polyblend CoLtd | Yummy Town vs. Microtips Technology | Yummy Town vs. Simplo Technology Co |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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