Correlation Between Pylon Public and Central Retail
Can any of the company-specific risk be diversified away by investing in both Pylon Public and Central Retail 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 Pylon Public and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pylon Public and Central Retail, you can compare the effects of market volatilities on Pylon Public and Central Retail 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 Pylon Public with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pylon Public and Central Retail.
Diversification Opportunities for Pylon Public and Central Retail
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pylon and Central is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pylon Public and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and Pylon Public 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 Pylon Public are associated (or correlated) with Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of Pylon Public i.e., Pylon Public and Central Retail go up and down completely randomly.
Pair Corralation between Pylon Public and Central Retail
Assuming the 90 days trading horizon Pylon Public is expected to under-perform the Central Retail. But the stock apears to be less risky and, when comparing its historical volatility, Pylon Public is 1.31 times less risky than Central Retail. The stock trades about -0.41 of its potential returns per unit of risk. The Central Retail is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Central Retail on August 29, 2024 and sell it today you would earn a total of 300.00 from holding Central Retail or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pylon Public vs. Central Retail
Performance |
| Timeline |
| Pylon Public |
| Central Retail |
Pylon Public and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pylon Public and Central Retail
The main advantage of trading using opposite Pylon Public and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pylon Public position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.| Pylon Public vs. Seafco Public | Pylon Public vs. PTG Energy PCL | Pylon Public vs. CH Karnchang Public | Pylon Public vs. Ratchthani Leasing Public |
| Central Retail vs. SCG PACKAGING PCL NVDR | Central Retail vs. CK Power Public | Central Retail vs. Thai Metal Drum | Central Retail vs. Country Group Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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