Correlation Between PEPTONIC MEDICAL and PPHE HOTEL

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

By analyzing existing cross correlation between PEPTONIC MEDICAL and PPHE HOTEL GROUP, you can compare the effects of market volatilities on PEPTONIC MEDICAL and PPHE HOTEL 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 PEPTONIC MEDICAL with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEPTONIC MEDICAL and PPHE HOTEL.

Diversification Opportunities for PEPTONIC MEDICAL and PPHE HOTEL

0.0

Correlation Coefficient

PEPTONIC MEDICAL  PPHE HOTEL

Pay attention - limited upside

The 3 months correlation between PEPTONIC and PPHE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PEPTONIC MEDICAL and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of PEPTONIC MEDICAL i.e., PEPTONIC MEDICAL and PPHE HOTEL go up and down completely randomly.

Pair Corralation between PEPTONIC MEDICAL and PPHE HOTEL

Assuming the 90 days horizon PEPTONIC MEDICAL is expected to generate 35.3 times more return on investment than PPHE HOTEL. However, PEPTONIC MEDICAL is 35.3 times more volatile than PPHE HOTEL GROUP. It trades about 0.07 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.07 per unit of risk. If you would invest  0.46  in PEPTONIC MEDICAL on October 9, 2024 and sell it today you would lose (0.44) from holding PEPTONIC MEDICAL or give up 95.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PEPTONIC MEDICAL  vs.  PPHE HOTEL GROUP

PEPTONIC MEDICAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PEPTONIC MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PEPTONIC MEDICAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PPHE HOTEL GROUP

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PPHE HOTEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PEPTONIC MEDICAL and PPHE HOTEL

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

The idea behind PEPTONIC MEDICAL and PPHE HOTEL GROUP 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..