Correlation Between Prima Marine and Power Solution
Can any of the company-specific risk be diversified away by investing in both Prima Marine and Power Solution 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 Prima Marine and Power Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prima Marine Public and Power Solution Technologies, you can compare the effects of market volatilities on Prima Marine and Power Solution 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 Prima Marine with a short position of Power Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prima Marine and Power Solution.
Diversification Opportunities for Prima Marine and Power Solution
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prima and Power is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Prima Marine Public and Power Solution Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Solution Techn and Prima Marine 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 Prima Marine Public are associated (or correlated) with Power Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Solution Techn has no effect on the direction of Prima Marine i.e., Prima Marine and Power Solution go up and down completely randomly.
Pair Corralation between Prima Marine and Power Solution
Assuming the 90 days trading horizon Prima Marine is expected to generate 19.94 times less return on investment than Power Solution. But when comparing it to its historical volatility, Prima Marine Public is 24.65 times less risky than Power Solution. It trades about 0.04 of its potential returns per unit of risk. Power Solution Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Power Solution Technologies on August 24, 2024 and sell it today you would lose (118.00) from holding Power Solution Technologies or give up 71.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Prima Marine Public vs. Power Solution Technologies
Performance |
| Timeline |
| Prima Marine Public |
| Power Solution Techn |
Prima Marine and Power Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prima Marine and Power Solution
The main advantage of trading using opposite Prima Marine and Power Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prima Marine position performs unexpectedly, Power Solution 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 Solution will offset losses from the drop in Power Solution's long position.| Prima Marine vs. PTG Energy PCL | Prima Marine vs. WHA Public | Prima Marine vs. BTS Group Holdings | Prima Marine vs. AP Public |
| Power Solution vs. WHA Public | Power Solution vs. Siri Prime Office | Power Solution vs. Ananda Development Public | Power Solution vs. Bangkok Land 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |