Correlation Between Power Line and Chukai Public
Can any of the company-specific risk be diversified away by investing in both Power Line and Chukai 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 Power Line and Chukai Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Line Engineering and Chukai Public, you can compare the effects of market volatilities on Power Line and Chukai 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 Power Line with a short position of Chukai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Line and Chukai Public.
Diversification Opportunities for Power Line and Chukai Public
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Power and Chukai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Power Line Engineering and Chukai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chukai Public and Power Line 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 Power Line Engineering are associated (or correlated) with Chukai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chukai Public has no effect on the direction of Power Line i.e., Power Line and Chukai Public go up and down completely randomly.
Pair Corralation between Power Line and Chukai Public
Assuming the 90 days trading horizon Power Line Engineering is expected to generate 1.0 times more return on investment than Chukai Public. However, Power Line Engineering is 1.0 times less risky than Chukai Public. It trades about 0.04 of its potential returns per unit of risk. Chukai Public is currently generating about 0.04 per unit of risk. If you would invest 69.00 in Power Line Engineering on September 1, 2024 and sell it today you would lose (32.00) from holding Power Line Engineering or give up 46.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Line Engineering vs. Chukai Public
Performance |
| Timeline |
| Power Line Engineering |
| Chukai Public |
Power Line and Chukai Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Line and Chukai Public
The main advantage of trading using opposite Power Line and Chukai Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Line position performs unexpectedly, Chukai 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 Chukai Public will offset losses from the drop in Chukai Public's long position.| Power Line vs. Gulf Energy Development | Power Line vs. Energy Absolute Public | Power Line vs. WHA Public | Power Line vs. Bangkok Expressway and |
| Chukai Public vs. Christiani Nielsen Public | Chukai Public vs. Castle Peak Holdings | Chukai Public vs. Capital Engineering Network | Chukai Public vs. CH Karnchang 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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