Correlation Between InfoBank and PH Tech

Can any of the company-specific risk be diversified away by investing in both InfoBank and PH Tech 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 InfoBank and PH Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InfoBank and PH Tech Co, you can compare the effects of market volatilities on InfoBank and PH Tech 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 InfoBank with a short position of PH Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and PH Tech.

Diversification Opportunities for InfoBank and PH Tech

0.78

Correlation Coefficient

InfoBank  PH Tech

Poor diversification

The 3 months correlation between InfoBank and 239890 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech and InfoBank 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 InfoBank are associated (or correlated) with PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of InfoBank i.e., InfoBank and PH Tech go up and down completely randomly.

Pair Corralation between InfoBank and PH Tech

Assuming the 90 days trading horizon InfoBank is expected to generate 1.22 times more return on investment than PH Tech. However, InfoBank is 1.22 times more volatile than PH Tech Co. It trades about 0.12 of its potential returns per unit of risk. PH Tech Co is currently generating about 0.09 per unit of risk. If you would invest  576,086  in InfoBank on October 25, 2024 and sell it today you would earn a total of  183,914  from holding InfoBank or generate 31.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

InfoBank  vs.  PH Tech Co

InfoBank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfoBank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, InfoBank sustained solid returns over the last few months and may actually be approaching a breakup point.

PH Tech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PH Tech Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PH Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfoBank and PH Tech

The main advantage of trading using opposite InfoBank and PH Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, PH Tech 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 PH Tech will offset losses from the drop in PH Tech's long position.

The idea behind InfoBank and PH Tech Co 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.