Correlation Between Est Global and Pontex Polyblend

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

By analyzing existing cross correlation between Est Global Apparel and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Est Global and Pontex Polyblend 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 Est Global with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Pontex Polyblend.

Diversification Opportunities for Est Global and Pontex Polyblend

-0.28

Correlation Coefficient

Est Global  Pontex Polyblend

Very good diversification

The 3 months correlation between Est and Pontex is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Est Global 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 Est Global Apparel are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Est Global i.e., Est Global and Pontex Polyblend go up and down completely randomly.

Pair Corralation between Est Global and Pontex Polyblend

Assuming the 90 days trading horizon Est Global Apparel is expected to under-perform the Pontex Polyblend. In addition to that, Est Global is 1.64 times more volatile than Pontex Polyblend CoLtd. It trades about -0.08 of its total potential returns per unit of risk. Pontex Polyblend CoLtd is currently generating about -0.02 per unit of volatility. If you would invest  2,230  in Pontex Polyblend CoLtd on October 8, 2024 and sell it today you would lose (35.00) from holding Pontex Polyblend CoLtd or give up 1.57% of portfolio value over 90 days.

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

Est Global Apparel  vs.  Pontex Polyblend CoLtd

Est Global Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Est Global Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pontex Polyblend CoLtd

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pontex Polyblend CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Pontex Polyblend showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Est Global and Pontex Polyblend

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

The idea behind Est Global Apparel and Pontex Polyblend CoLtd 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.