Correlation Between Century Iron and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both Century Iron and Pontex Polyblend 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 Century Iron and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Century Iron and Pontex Polyblend 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 Century Iron with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Pontex Polyblend.
Diversification Opportunities for Century Iron and Pontex Polyblend
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Pontex is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Century Iron 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 Century Iron And are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Century Iron i.e., Century Iron and Pontex Polyblend go up and down completely randomly.
Pair Corralation between Century Iron and Pontex Polyblend
Assuming the 90 days trading horizon Century Iron And is expected to generate 1.15 times more return on investment than Pontex Polyblend. However, Century Iron is 1.15 times more volatile than Pontex Polyblend CoLtd. It trades about 0.06 of its potential returns per unit of risk. Pontex Polyblend CoLtd is currently generating about 0.05 per unit of risk. If you would invest 8,620 in Century Iron And on September 14, 2024 and sell it today you would earn a total of 9,280 from holding Century Iron And or generate 107.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Iron And vs. Pontex Polyblend CoLtd
Performance |
| Timeline |
| Century Iron And |
| Pontex Polyblend CoLtd |
Century Iron and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Iron and Pontex Polyblend
The main advantage of trading using opposite Century Iron and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron position performs unexpectedly, Pontex Polyblend 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 Pontex Polyblend will offset losses from the drop in Pontex Polyblend's long position.| Century Iron vs. Swancor Holding Co | Century Iron vs. Hsin Kuang Steel | Century Iron vs. Ta Chen Stainless | Century Iron vs. Chung Hung Steel |
| Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. Yem Chio Co | Pontex Polyblend vs. Ocean Plastics Co | Pontex Polyblend vs. Formosan Rubber Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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