Correlation Between PCS Machine and President Automobile
Can any of the company-specific risk be diversified away by investing in both PCS Machine and President Automobile 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 President Automobile 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 President Automobile Industries, you can compare the effects of market volatilities on PCS Machine and President Automobile 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 President Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCS Machine and President Automobile.
Diversification Opportunities for PCS Machine and President Automobile
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PCS and President is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PCS Machine Group and President Automobile Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Automobile 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 President Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Automobile has no effect on the direction of PCS Machine i.e., PCS Machine and President Automobile go up and down completely randomly.
Pair Corralation between PCS Machine and President Automobile
Assuming the 90 days trading horizon PCS Machine is expected to generate 1.35 times less return on investment than President Automobile. In addition to that, PCS Machine is 1.35 times more volatile than President Automobile Industries. It trades about 0.13 of its total potential returns per unit of risk. President Automobile Industries is currently generating about 0.24 per unit of volatility. If you would invest 134.00 in President Automobile Industries on November 27, 2024 and sell it today you would earn a total of 10.00 from holding President Automobile Industries or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCS Machine Group vs. President Automobile Industrie
Performance |
| Timeline |
| PCS Machine Group |
| President Automobile |
PCS Machine and President Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCS Machine and President Automobile
The main advantage of trading using opposite PCS Machine and President Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCS Machine position performs unexpectedly, President Automobile 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 President Automobile will offset losses from the drop in President Automobile'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 |
| President Automobile vs. Phol Dhanya Public | President Automobile vs. PTT Oil and | President Automobile vs. Pico Public | President Automobile vs. Pioneer Motor 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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