Correlation Between Pontex Polyblend and Mosa Industrial
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Mosa Industrial 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 Mosa Industrial 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 Mosa Industrial Corp, you can compare the effects of market volatilities on Pontex Polyblend and Mosa Industrial 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 Mosa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Mosa Industrial.
Diversification Opportunities for Pontex Polyblend and Mosa Industrial
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pontex and Mosa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Mosa Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosa Industrial 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 Mosa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosa Industrial Corp has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Mosa Industrial go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Mosa Industrial
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 1.99 times more return on investment than Mosa Industrial. However, Pontex Polyblend is 1.99 times more volatile than Mosa Industrial Corp. It trades about 0.08 of its potential returns per unit of risk. Mosa Industrial Corp is currently generating about -0.06 per unit of risk. If you would invest 2,030 in Pontex Polyblend CoLtd on October 26, 2024 and sell it today you would earn a total of 260.00 from holding Pontex Polyblend CoLtd or generate 12.81% 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. Mosa Industrial Corp
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Mosa Industrial Corp |
Pontex Polyblend and Mosa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Mosa Industrial
The main advantage of trading using opposite Pontex Polyblend and Mosa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Mosa Industrial 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 Mosa Industrial will offset losses from the drop in Mosa Industrial's long position.| Pontex Polyblend vs. FarGlory Hotel Co | Pontex Polyblend vs. Thye Ming Industrial | Pontex Polyblend vs. First Hotel Co | Pontex Polyblend vs. Camellia Metal Co |
| Mosa Industrial vs. Rexon Industrial Corp | Mosa Industrial vs. Lee Chi Enterprises | Mosa Industrial vs. Chung Hsin Electric Machinery |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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