Correlation Between Peoples Garment and Power Line
Can any of the company-specific risk be diversified away by investing in both Peoples Garment and Power Line 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 Peoples Garment and Power Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Garment Public and Power Line Engineering, you can compare the effects of market volatilities on Peoples Garment and Power Line 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 Peoples Garment with a short position of Power Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Garment and Power Line.
Diversification Opportunities for Peoples Garment and Power Line
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Peoples and Power is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Garment Public and Power Line Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Line Engineering and Peoples Garment 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 Peoples Garment Public are associated (or correlated) with Power Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Line Engineering has no effect on the direction of Peoples Garment i.e., Peoples Garment and Power Line go up and down completely randomly.
Pair Corralation between Peoples Garment and Power Line
Assuming the 90 days horizon Peoples Garment Public is expected to generate 1.0 times more return on investment than Power Line. However, Peoples Garment is 1.0 times more volatile than Power Line Engineering. It trades about 0.08 of its potential returns per unit of risk. Power Line Engineering is currently generating about 0.08 per unit of risk. If you would invest 900.00 in Peoples Garment Public on September 3, 2024 and sell it today you would lose (5.00) from holding Peoples Garment Public or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Peoples Garment Public vs. Power Line Engineering
Performance |
| Timeline |
| Peoples Garment Public |
| Power Line Engineering |
Peoples Garment and Power Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Garment and Power Line
The main advantage of trading using opposite Peoples Garment and Power Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Garment position performs unexpectedly, Power Line 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 Power Line will offset losses from the drop in Power Line's long position.| Peoples Garment vs. Ocean Glass Public | Peoples Garment vs. President Bakery Public | Peoples Garment vs. Pan Asia Footwear | Peoples Garment vs. Pato Chemical Industry |
| Power Line vs. Asia Aviation Public | Power Line vs. Bangkok Dusit Medical | Power Line vs. Bangkok Expressway and | Power Line vs. Airports of Thailand |
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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