Correlation Between Pico Public and PRG Public
Can any of the company-specific risk be diversified away by investing in both Pico Public and PRG Public 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 Pico Public and PRG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pico Public and PRG Public, you can compare the effects of market volatilities on Pico Public and PRG Public 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 Pico Public with a short position of PRG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pico Public and PRG Public.
Diversification Opportunities for Pico Public and PRG Public
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pico and PRG is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pico Public and PRG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRG Public and Pico Public 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 Pico Public are associated (or correlated) with PRG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRG Public has no effect on the direction of Pico Public i.e., Pico Public and PRG Public go up and down completely randomly.
Pair Corralation between Pico Public and PRG Public
Assuming the 90 days trading horizon Pico Public is expected to generate 2.02 times less return on investment than PRG Public. But when comparing it to its historical volatility, Pico Public is 1.41 times less risky than PRG Public. It trades about 0.05 of its potential returns per unit of risk. PRG Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,053 in PRG Public on August 31, 2024 and sell it today you would lose (168.00) from holding PRG Public or give up 15.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pico Public vs. PRG Public
Performance |
| Timeline |
| Pico Public |
| PRG Public |
Pico Public and PRG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pico Public and PRG Public
The main advantage of trading using opposite Pico Public and PRG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pico Public position performs unexpectedly, PRG Public 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 PRG Public will offset losses from the drop in PRG Public's long position.| Pico Public vs. Prodigy Public | Pico Public vs. Panjawattana Plastic Public | Pico Public vs. Phol Dhanya Public | Pico Public vs. Moong Pattana International |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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