Correlation Between Posiflex Technology and Camellia Metal

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

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

Diversification Opportunities for Posiflex Technology and Camellia Metal

-0.65

Correlation Coefficient

Posiflex Technology  Camellia Metal

Excellent diversification

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

Pair Corralation between Posiflex Technology and Camellia Metal

Assuming the 90 days trading horizon Posiflex Technology is expected to generate 1.9 times more return on investment than Camellia Metal. However, Posiflex Technology is 1.9 times more volatile than Camellia Metal Co. It trades about 0.38 of its potential returns per unit of risk. Camellia Metal Co is currently generating about 0.09 per unit of risk. If you would invest  27,900  in Posiflex Technology on September 16, 2024 and sell it today you would earn a total of  5,900  from holding Posiflex Technology or generate 21.15% return on investment over 90 days.

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

Posiflex Technology  vs.  Camellia Metal Co

Posiflex Technology

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Posiflex Technology are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Posiflex Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Camellia Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camellia Metal Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Camellia Metal is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Posiflex Technology and Camellia Metal

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

The idea behind Posiflex Technology and Camellia Metal 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.