Correlation Between Power Solution and Project Planning
Can any of the company-specific risk be diversified away by investing in both Power Solution and Project Planning 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 Solution and Project Planning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Solution Technologies and Project Planning Service, you can compare the effects of market volatilities on Power Solution and Project Planning 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 Solution with a short position of Project Planning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Solution and Project Planning.
Diversification Opportunities for Power Solution and Project Planning
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Power and Project is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Power Solution Technologies and Project Planning Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Project Planning Service and Power Solution 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 Solution Technologies are associated (or correlated) with Project Planning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Project Planning Service has no effect on the direction of Power Solution i.e., Power Solution and Project Planning go up and down completely randomly.
Pair Corralation between Power Solution and Project Planning
Assuming the 90 days trading horizon Power Solution Technologies is expected to generate 1.0 times more return on investment than Project Planning. However, Power Solution Technologies is 1.0 times less risky than Project Planning. It trades about 0.11 of its potential returns per unit of risk. Project Planning Service is currently generating about 0.11 per unit of risk. If you would invest 49.00 in Power Solution Technologies on August 25, 2024 and sell it today you would lose (3.00) from holding Power Solution Technologies or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Solution Technologies vs. Project Planning Service
Performance |
| Timeline |
| Power Solution Techn |
| Project Planning Service |
Power Solution and Project Planning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Solution and Project Planning
The main advantage of trading using opposite Power Solution and Project Planning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Solution position performs unexpectedly, Project Planning 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 Project Planning will offset losses from the drop in Project Planning's long position.| Power Solution vs. WHA Public | Power Solution vs. Siri Prime Office | Power Solution vs. Ananda Development Public | Power Solution vs. Bangkok Land Public |
| Project Planning vs. Power Solution Technologies | Project Planning vs. Kingsmen CMTI Public | Project Planning vs. Panjawattana Plastic Public | Project Planning vs. Cho Thavee 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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