Correlation Between PCS Machine and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both PCS Machine and Hwa Fong 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 PCS Machine and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCS Machine Group and Hwa Fong Rubber, you can compare the effects of market volatilities on PCS Machine and Hwa Fong 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 PCS Machine with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCS Machine and Hwa Fong.
Diversification Opportunities for PCS Machine and Hwa Fong
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PCS and Hwa is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PCS Machine Group and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and PCS Machine 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 PCS Machine Group are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of PCS Machine i.e., PCS Machine and Hwa Fong go up and down completely randomly.
Pair Corralation between PCS Machine and Hwa Fong
Assuming the 90 days trading horizon PCS Machine Group is expected to generate 0.91 times more return on investment than Hwa Fong. However, PCS Machine Group is 1.1 times less risky than Hwa Fong. It trades about -0.09 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.13 per unit of risk. If you would invest 436.00 in PCS Machine Group on September 13, 2024 and sell it today you would lose (8.00) from holding PCS Machine Group or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PCS Machine Group vs. Hwa Fong Rubber
Performance |
| Timeline |
| PCS Machine Group |
| Hwa Fong Rubber |
PCS Machine and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCS Machine and Hwa Fong
The main advantage of trading using opposite PCS Machine and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCS Machine position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| PCS Machine vs. Somboon Advance Technology | PCS Machine vs. MCS Steel Public | PCS Machine vs. Pacific Pipe Public | PCS Machine vs. MC Group Public |
| Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Haad Thip Public | Hwa Fong vs. Italian Thai Development Public |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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