Correlation Between Lease IT and Phatra Leasing
Can any of the company-specific risk be diversified away by investing in both Lease IT and Phatra Leasing 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 Lease IT and Phatra Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lease IT Public and Phatra Leasing Public, you can compare the effects of market volatilities on Lease IT and Phatra Leasing 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 Lease IT with a short position of Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lease IT and Phatra Leasing.
Diversification Opportunities for Lease IT and Phatra Leasing
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lease and Phatra is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lease IT Public and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public and Lease IT 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 Lease IT Public are associated (or correlated) with Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Lease IT i.e., Lease IT and Phatra Leasing go up and down completely randomly.
Pair Corralation between Lease IT and Phatra Leasing
Assuming the 90 days trading horizon Lease IT Public is expected to generate 3.33 times more return on investment than Phatra Leasing. However, Lease IT is 3.33 times more volatile than Phatra Leasing Public. It trades about -0.03 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about -0.17 per unit of risk. If you would invest 65.00 in Lease IT Public on October 22, 2024 and sell it today you would lose (2.00) from holding Lease IT Public or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lease IT Public vs. Phatra Leasing Public
Performance |
| Timeline |
| Lease IT Public |
| Phatra Leasing Public |
Lease IT and Phatra Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lease IT and Phatra Leasing
The main advantage of trading using opposite Lease IT and Phatra Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lease IT position performs unexpectedly, Phatra Leasing 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 Phatra Leasing will offset losses from the drop in Phatra Leasing's long position.| Lease IT vs. Amanah Leasing Public | Lease IT vs. Muangthai Capital Public | Lease IT vs. Infraset Public | Lease IT vs. JMT Network Services |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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