Correlation Between PH Tech and Celltrion

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Can any of the company-specific risk be diversified away by investing in both PH Tech and Celltrion 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 PH Tech and Celltrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Celltrion, you can compare the effects of market volatilities on PH Tech and Celltrion 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 PH Tech with a short position of Celltrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Celltrion.

Diversification Opportunities for PH Tech and Celltrion

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between 239890 and Celltrion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Celltrion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celltrion and PH Tech 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 PH Tech Co are associated (or correlated) with Celltrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celltrion has no effect on the direction of PH Tech i.e., PH Tech and Celltrion go up and down completely randomly.

Pair Corralation between PH Tech and Celltrion

Assuming the 90 days trading horizon PH Tech Co is expected to generate 1.76 times more return on investment than Celltrion. However, PH Tech is 1.76 times more volatile than Celltrion. It trades about 0.08 of its potential returns per unit of risk. Celltrion is currently generating about -0.07 per unit of risk. If you would invest  781,000  in PH Tech Co on October 25, 2024 and sell it today you would earn a total of  26,000  from holding PH Tech Co or generate 3.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

PH Tech Co  vs.  Celltrion

 Performance 
       Timeline  
PH Tech 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
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.
Celltrion 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Celltrion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Celltrion is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PH Tech and Celltrion Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PH Tech and Celltrion

The main advantage of trading using opposite PH Tech and Celltrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Celltrion 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 Celltrion will offset losses from the drop in Celltrion's long position.
The idea behind PH Tech Co and Celltrion 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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