Correlation Between Pontex Polyblend and Tait Marketing
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Tait Marketing 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 Tait Marketing 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 Tait Marketing Distribution, you can compare the effects of market volatilities on Pontex Polyblend and Tait Marketing 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 Tait Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Tait Marketing.
Diversification Opportunities for Pontex Polyblend and Tait Marketing
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pontex and Tait is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Tait Marketing Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tait Marketing Distr 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 Tait Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tait Marketing Distr has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Tait Marketing go up and down completely randomly.
Pair Corralation between Pontex Polyblend and Tait Marketing
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 7.88 times more return on investment than Tait Marketing. However, Pontex Polyblend is 7.88 times more volatile than Tait Marketing Distribution. It trades about 0.14 of its potential returns per unit of risk. Tait Marketing Distribution is currently generating about 0.06 per unit of risk. If you would invest 2,010 in Pontex Polyblend CoLtd on September 2, 2024 and sell it today you would earn a total of 190.00 from holding Pontex Polyblend CoLtd or generate 9.45% 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. Tait Marketing Distribution
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| Tait Marketing Distr |
Pontex Polyblend and Tait Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and Tait Marketing
The main advantage of trading using opposite Pontex Polyblend and Tait Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, Tait Marketing 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 Tait Marketing will offset losses from the drop in Tait Marketing'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 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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