Correlation Between Power Solution and Super Energy
Can any of the company-specific risk be diversified away by investing in both Power Solution and Super Energy 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 Super Energy 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 Super Energy, you can compare the effects of market volatilities on Power Solution and Super Energy 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 Super Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Solution and Super Energy.
Diversification Opportunities for Power Solution and Super Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Power and Super is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Power Solution Technologies and Super Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Energy 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 Super Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Energy has no effect on the direction of Power Solution i.e., Power Solution and Super Energy go up and down completely randomly.
Pair Corralation between Power Solution and Super Energy
Assuming the 90 days trading horizon Power Solution is expected to generate 1.01 times less return on investment than Super Energy. In addition to that, Power Solution is 1.0 times more volatile than Super Energy. It trades about 0.07 of its total potential returns per unit of risk. Super Energy is currently generating about 0.07 per unit of volatility. If you would invest 30.00 in Super Energy on September 3, 2024 and sell it today you would lose (3.00) from holding Super Energy or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Solution Technologies vs. Super Energy
Performance |
| Timeline |
| Power Solution Techn |
| Super Energy |
Power Solution and Super Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Solution and Super Energy
The main advantage of trading using opposite Power Solution and Super Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Solution position performs unexpectedly, Super Energy 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 Super Energy will offset losses from the drop in Super Energy's long position.| Power Solution vs. Super Energy | Power Solution vs. WHA Public | Power Solution vs. Siri Prime Office | Power Solution vs. Ananda Development Public |
| Super Energy vs. Bangchak Public | Super Energy vs. Gulf Energy Development | Super Energy vs. Global Power Synergy | Super Energy vs. Bangkok Expressway and |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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