Correlation Between Pha Lai and Picomat Plastic
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Picomat Plastic 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 Pha Lai and Picomat Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Lai Thermal and Picomat Plastic JSC, you can compare the effects of market volatilities on Pha Lai and Picomat Plastic 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 Pha Lai with a short position of Picomat Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Picomat Plastic.
Diversification Opportunities for Pha Lai and Picomat Plastic
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pha and Picomat is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Picomat Plastic JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picomat Plastic JSC and Pha Lai 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 Pha Lai Thermal are associated (or correlated) with Picomat Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picomat Plastic JSC has no effect on the direction of Pha Lai i.e., Pha Lai and Picomat Plastic go up and down completely randomly.
Pair Corralation between Pha Lai and Picomat Plastic
Assuming the 90 days trading horizon Pha Lai Thermal is expected to under-perform the Picomat Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Pha Lai Thermal is 1.28 times less risky than Picomat Plastic. The stock trades about -0.29 of its potential returns per unit of risk. The Picomat Plastic JSC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,270,000 in Picomat Plastic JSC on August 29, 2024 and sell it today you would earn a total of 10,000 from holding Picomat Plastic JSC or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Lai Thermal vs. Picomat Plastic JSC
Performance |
| Timeline |
| Pha Lai Thermal |
| Picomat Plastic JSC |
Pha Lai and Picomat Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Picomat Plastic
The main advantage of trading using opposite Pha Lai and Picomat Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Picomat Plastic 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 Picomat Plastic will offset losses from the drop in Picomat Plastic's long position.| Pha Lai vs. FIT INVEST JSC | Pha Lai vs. Damsan JSC | Pha Lai vs. An Phat Plastic | Pha Lai vs. APG Securities Joint |
| Picomat Plastic vs. FIT INVEST JSC | Picomat Plastic vs. Damsan JSC | Picomat Plastic vs. An Phat Plastic | Picomat Plastic vs. APG Securities Joint |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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