Correlation Between Pha Lai and Techno Agricultural
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Techno Agricultural 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 Techno Agricultural 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 Techno Agricultural Supplying, you can compare the effects of market volatilities on Pha Lai and Techno Agricultural 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 Techno Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Techno Agricultural.
Diversification Opportunities for Pha Lai and Techno Agricultural
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pha and Techno is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Techno Agricultural Supplying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techno Agricultural 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 Techno Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techno Agricultural has no effect on the direction of Pha Lai i.e., Pha Lai and Techno Agricultural go up and down completely randomly.
Pair Corralation between Pha Lai and Techno Agricultural
Assuming the 90 days trading horizon Pha Lai Thermal is expected to generate 1.47 times more return on investment than Techno Agricultural. However, Pha Lai is 1.47 times more volatile than Techno Agricultural Supplying. It trades about -0.36 of its potential returns per unit of risk. Techno Agricultural Supplying is currently generating about -0.52 per unit of risk. If you would invest 1,230,000 in Pha Lai Thermal on September 1, 2024 and sell it today you would lose (125,000) from holding Pha Lai Thermal or give up 10.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Lai Thermal vs. Techno Agricultural Supplying
Performance |
| Timeline |
| Pha Lai Thermal |
| Techno Agricultural |
Pha Lai and Techno Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Techno Agricultural
The main advantage of trading using opposite Pha Lai and Techno Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Techno Agricultural 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 Techno Agricultural will offset losses from the drop in Techno Agricultural's long position.The idea behind Pha Lai Thermal and Techno Agricultural Supplying pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Techno Agricultural vs. FIT INVEST JSC | Techno Agricultural vs. Damsan JSC | Techno Agricultural vs. An Phat Plastic | Techno Agricultural vs. Alphanam ME |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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