Correlation Between Picomat Plastic and HUD1 Investment
Can any of the company-specific risk be diversified away by investing in both Picomat Plastic and HUD1 Investment 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 Picomat Plastic and HUD1 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picomat Plastic JSC and HUD1 Investment and, you can compare the effects of market volatilities on Picomat Plastic and HUD1 Investment 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 Picomat Plastic with a short position of HUD1 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picomat Plastic and HUD1 Investment.
Diversification Opportunities for Picomat Plastic and HUD1 Investment
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Picomat and HUD1 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Picomat Plastic JSC and HUD1 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUD1 Investment and Picomat Plastic 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 Picomat Plastic JSC are associated (or correlated) with HUD1 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUD1 Investment has no effect on the direction of Picomat Plastic i.e., Picomat Plastic and HUD1 Investment go up and down completely randomly.
Pair Corralation between Picomat Plastic and HUD1 Investment
Assuming the 90 days trading horizon Picomat Plastic JSC is expected to generate 0.48 times more return on investment than HUD1 Investment. However, Picomat Plastic JSC is 2.1 times less risky than HUD1 Investment. It trades about 0.14 of its potential returns per unit of risk. HUD1 Investment and is currently generating about -0.04 per unit of risk. If you would invest 1,250,000 in Picomat Plastic JSC on October 17, 2024 and sell it today you would earn a total of 90,000 from holding Picomat Plastic JSC or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Picomat Plastic JSC vs. HUD1 Investment and
Performance |
| Timeline |
| Picomat Plastic JSC |
| HUD1 Investment |
Picomat Plastic and HUD1 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picomat Plastic and HUD1 Investment
The main advantage of trading using opposite Picomat Plastic and HUD1 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picomat Plastic position performs unexpectedly, HUD1 Investment 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 HUD1 Investment will offset losses from the drop in HUD1 Investment's long position.| Picomat Plastic vs. Pha Lai Thermal | Picomat Plastic vs. Century Synthetic Fiber | Picomat Plastic vs. Vietnam Petroleum Transport | Picomat Plastic vs. Hai An Transport |
| HUD1 Investment vs. Picomat Plastic JSC | HUD1 Investment vs. Hochiminh City Metal | HUD1 Investment vs. Vincom Retail JSC | HUD1 Investment vs. Sao Vang Rubber |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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