Correlation Between FLOW TRADERS and PT Steel
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and PT Steel 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 FLOW TRADERS and PT Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and PT Steel Pipe, you can compare the effects of market volatilities on FLOW TRADERS and PT Steel 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 FLOW TRADERS with a short position of PT Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and PT Steel.
Diversification Opportunities for FLOW TRADERS and PT Steel
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and S08 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and PT Steel Pipe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Steel Pipe and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with PT Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Steel Pipe has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and PT Steel go up and down completely randomly.
Pair Corralation between FLOW TRADERS and PT Steel
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.24 times more return on investment than PT Steel. However, FLOW TRADERS LTD is 4.11 times less risky than PT Steel. It trades about 0.27 of its potential returns per unit of risk. PT Steel Pipe is currently generating about -0.02 per unit of risk. If you would invest 2,106 in FLOW TRADERS LTD on October 12, 2024 and sell it today you would earn a total of 216.00 from holding FLOW TRADERS LTD or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. PT Steel Pipe
Performance |
| Timeline |
| FLOW TRADERS LTD |
| PT Steel Pipe |
FLOW TRADERS and PT Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and PT Steel
The main advantage of trading using opposite FLOW TRADERS and PT Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, PT Steel 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 PT Steel will offset losses from the drop in PT Steel's long position.| FLOW TRADERS vs. Nufarm Limited | FLOW TRADERS vs. Australian Agricultural | FLOW TRADERS vs. Daito Trust Construction | FLOW TRADERS vs. Chongqing Machinery Electric |
| PT Steel vs. MARKET VECTR RETAIL | PT Steel vs. FLOW TRADERS LTD | PT Steel vs. Zoom Video Communications | PT Steel vs. Charter Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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