Correlation Between Song Hong and Picomat Plastic
Can any of the company-specific risk be diversified away by investing in both Song Hong and Picomat 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 Song Hong and Picomat Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Aluminum and Picomat Plastic JSC, you can compare the effects of market volatilities on Song Hong and Picomat 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 Song Hong with a short position of Picomat Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Picomat Plastic.
Diversification Opportunities for Song Hong and Picomat Plastic
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Song and Picomat is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Aluminum and Picomat Plastic JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picomat Plastic JSC and Song Hong 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 Song Hong Aluminum are associated (or correlated) with Picomat Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picomat Plastic JSC has no effect on the direction of Song Hong i.e., Song Hong and Picomat Plastic go up and down completely randomly.
Pair Corralation between Song Hong and Picomat Plastic
Assuming the 90 days trading horizon Song Hong is expected to generate 11.42 times less return on investment than Picomat Plastic. But when comparing it to its historical volatility, Song Hong Aluminum is 1.18 times less risky than Picomat Plastic. It trades about 0.01 of its potential returns per unit of risk. Picomat Plastic JSC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,270,000 in Picomat Plastic JSC on October 24, 2024 and sell it today you would earn a total of 60,000 from holding Picomat Plastic JSC or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Hong Aluminum vs. Picomat Plastic JSC
Performance |
| Timeline |
| Song Hong Aluminum |
| Picomat Plastic JSC |
Song Hong and Picomat Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Picomat Plastic
The main advantage of trading using opposite Song Hong and Picomat Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong position performs unexpectedly, Picomat 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 Picomat Plastic will offset losses from the drop in Picomat Plastic's long position.| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. APG Securities Joint |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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