Correlation Between Powertech Industrial and Macroblock

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

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

Diversification Opportunities for Powertech Industrial and Macroblock

-0.59

Correlation Coefficient

Powertech Industrial  Macroblock

Excellent diversification

The 3 months correlation between Powertech and Macroblock is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Industrial Co and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and Powertech Industrial 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 Powertech Industrial Co are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Powertech Industrial i.e., Powertech Industrial and Macroblock go up and down completely randomly.

Pair Corralation between Powertech Industrial and Macroblock

Assuming the 90 days trading horizon Powertech Industrial Co is expected to under-perform the Macroblock. But the stock apears to be less risky and, when comparing its historical volatility, Powertech Industrial Co is 1.12 times less risky than Macroblock. The stock trades about -0.19 of its potential returns per unit of risk. The Macroblock is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,010  in Macroblock on December 27, 2024 and sell it today you would earn a total of  380.00  from holding Macroblock or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Powertech Industrial Co  vs.  Macroblock

Powertech Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Powertech Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Macroblock

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macroblock are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Macroblock may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Powertech Industrial and Macroblock

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

The idea behind Powertech Industrial Co and Macroblock 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.