Correlation Between Pato Chemical and TOA PAINT
Can any of the company-specific risk be diversified away by investing in both Pato Chemical and TOA PAINT 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 Pato Chemical and TOA PAINT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pato Chemical Industry and TOA PAINT, you can compare the effects of market volatilities on Pato Chemical and TOA PAINT 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 Pato Chemical with a short position of TOA PAINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pato Chemical and TOA PAINT.
Diversification Opportunities for Pato Chemical and TOA PAINT
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pato and TOA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pato Chemical Industry and TOA PAINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOA PAINT and Pato Chemical 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 Pato Chemical Industry are associated (or correlated) with TOA PAINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOA PAINT has no effect on the direction of Pato Chemical i.e., Pato Chemical and TOA PAINT go up and down completely randomly.
Pair Corralation between Pato Chemical and TOA PAINT
Assuming the 90 days trading horizon Pato Chemical Industry is expected to generate 0.05 times more return on investment than TOA PAINT. However, Pato Chemical Industry is 19.14 times less risky than TOA PAINT. It trades about -0.35 of its potential returns per unit of risk. TOA PAINT is currently generating about -0.27 per unit of risk. If you would invest 880.00 in Pato Chemical Industry on September 5, 2024 and sell it today you would lose (30.00) from holding Pato Chemical Industry or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pato Chemical Industry vs. TOA PAINT
Performance |
| Timeline |
| Pato Chemical Industry |
| TOA PAINT |
Pato Chemical and TOA PAINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pato Chemical and TOA PAINT
The main advantage of trading using opposite Pato Chemical and TOA PAINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pato Chemical position performs unexpectedly, TOA PAINT 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 TOA PAINT will offset losses from the drop in TOA PAINT's long position.| Pato Chemical vs. PTT Public | Pato Chemical vs. PTT Exploration and | Pato Chemical vs. The Siam Cement | Pato Chemical vs. CP ALL Public |
| TOA PAINT vs. Bhiraj Office Leasehold | TOA PAINT vs. Firetrade Engineering Public | TOA PAINT vs. MCS Steel Public | TOA PAINT vs. Pato Chemical Industry |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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