Correlation Between Pontex Polyblend and Forcecon Technology
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Forcecon Technology 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 Forcecon Technology 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 Forcecon Technology Co, you can compare the effects of market volatilities on Pontex Polyblend and Forcecon Technology 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 Forcecon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Forcecon Technology.
Diversification Opportunities for Pontex Polyblend and Forcecon Technology
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pontex and Forcecon is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Forcecon Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forcecon Technology 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 Forcecon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forcecon Technology has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Forcecon Technology go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Forcecon Technology
Assuming the 90 days trading horizon Pontex Polyblend is expected to generate 1.5 times less return on investment than Forcecon Technology. In addition to that, Pontex Polyblend is 1.77 times more volatile than Forcecon Technology Co. It trades about 0.07 of its total potential returns per unit of risk. Forcecon Technology Co is currently generating about 0.18 per unit of volatility. If you would invest 15,050 in Forcecon Technology Co on September 13, 2024 and sell it today you would earn a total of 1,250 from holding Forcecon Technology Co or generate 8.31% 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. Forcecon Technology Co
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Forcecon Technology |
Pontex Polyblend and Forcecon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Forcecon Technology
The main advantage of trading using opposite Pontex Polyblend and Forcecon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Forcecon Technology 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 Forcecon Technology will offset losses from the drop in Forcecon Technology's long position.| Pontex Polyblend vs. Cameo Communications | Pontex Polyblend vs. Far EasTone Telecommunications | Pontex Polyblend vs. Oceanic Beverages Co | Pontex Polyblend vs. Tainet Communication System |
| Forcecon Technology vs. Alchip Technologies | Forcecon Technology vs. Grand Ocean Retail | Forcecon Technology vs. Wholetech System Hitech | Forcecon Technology vs. Syntek Semiconductor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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