Correlation Between Mega Lifesciences and Panjawattana Plastic
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Panjawattana Plastic 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 Mega Lifesciences and Panjawattana Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Panjawattana Plastic Public, you can compare the effects of market volatilities on Mega Lifesciences and Panjawattana Plastic 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 Mega Lifesciences with a short position of Panjawattana Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Panjawattana Plastic.
Diversification Opportunities for Mega Lifesciences and Panjawattana Plastic
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mega and Panjawattana is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Panjawattana Plastic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panjawattana Plastic and Mega Lifesciences 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 Mega Lifesciences Public are associated (or correlated) with Panjawattana Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panjawattana Plastic has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Panjawattana Plastic go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Panjawattana Plastic
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Panjawattana Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 28.43 times less risky than Panjawattana Plastic. The stock trades about -0.05 of its potential returns per unit of risk. The Panjawattana Plastic Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 398.00 in Panjawattana Plastic Public on November 5, 2024 and sell it today you would lose (176.00) from holding Panjawattana Plastic Public or give up 44.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Panjawattana Plastic Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Panjawattana Plastic |
Mega Lifesciences and Panjawattana Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Panjawattana Plastic
The main advantage of trading using opposite Mega Lifesciences and Panjawattana Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Panjawattana Plastic 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 Panjawattana Plastic will offset losses from the drop in Panjawattana Plastic's long position.| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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