Correlation Between Ocean Glass and Pan Asia
Can any of the company-specific risk be diversified away by investing in both Ocean Glass and Pan Asia 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 Ocean Glass and Pan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Glass Public and Pan Asia Footwear, you can compare the effects of market volatilities on Ocean Glass and Pan Asia 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 Ocean Glass with a short position of Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Glass and Pan Asia.
Diversification Opportunities for Ocean Glass and Pan Asia
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ocean and Pan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Glass Public and Pan Asia Footwear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Footwear and Ocean Glass 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 Ocean Glass Public are associated (or correlated) with Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Footwear has no effect on the direction of Ocean Glass i.e., Ocean Glass and Pan Asia go up and down completely randomly.
Pair Corralation between Ocean Glass and Pan Asia
Assuming the 90 days trading horizon Ocean Glass Public is expected to under-perform the Pan Asia. But the stock apears to be less risky and, when comparing its historical volatility, Ocean Glass Public is 1.19 times less risky than Pan Asia. The stock trades about -0.51 of its potential returns per unit of risk. The Pan Asia Footwear is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Pan Asia Footwear on September 3, 2024 and sell it today you would lose (5.00) from holding Pan Asia Footwear or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Glass Public vs. Pan Asia Footwear
Performance |
| Timeline |
| Ocean Glass Public |
| Pan Asia Footwear |
Ocean Glass and Pan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Glass and Pan Asia
The main advantage of trading using opposite Ocean Glass and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Glass position performs unexpectedly, Pan Asia 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 Pan Asia will offset losses from the drop in Pan Asia's long position.| Ocean Glass vs. Peoples Garment Public | Ocean Glass vs. LPN Development Public | Ocean Glass vs. Nawarat Patanakarn Public | Ocean Glass vs. President Bakery Public |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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