Correlation Between Pontex Polyblend and Yem Chio
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Yem Chio 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 Yem Chio 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 Yem Chio Co, you can compare the effects of market volatilities on Pontex Polyblend and Yem Chio 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 Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Yem Chio.
Diversification Opportunities for Pontex Polyblend and Yem Chio
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pontex and Yem is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio 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 Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Yem Chio go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Yem Chio
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 3.54 times more return on investment than Yem Chio. However, Pontex Polyblend is 3.54 times more volatile than Yem Chio Co. It trades about 0.13 of its potential returns per unit of risk. Yem Chio Co is currently generating about -0.08 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. Yem Chio Co
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Yem Chio |
Pontex Polyblend and Yem Chio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Yem Chio
The main advantage of trading using opposite Pontex Polyblend and Yem Chio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Yem Chio 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 Yem Chio will offset losses from the drop in Yem Chio'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 |
| Yem Chio vs. BES Engineering Co | Yem Chio vs. Continental Holdings Corp | Yem Chio vs. Kee Tai Properties | Yem Chio 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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