Correlation Between Pontex Polyblend and WinMate Communication

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

Diversification Opportunities for Pontex Polyblend and WinMate Communication

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Pontex and WinMate is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC and Pontex Polyblend 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 Pontex Polyblend CoLtd are associated (or correlated) with WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and WinMate Communication go up and down completely randomly.

Pair Corralation between Pontex Polyblend and WinMate Communication

Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 2.31 times more return on investment than WinMate Communication. However, Pontex Polyblend is 2.31 times more volatile than WinMate Communication INC. It trades about 0.08 of its potential returns per unit of risk. WinMate Communication INC is currently generating about 0.06 per unit of risk. If you would invest  2,080  in Pontex Polyblend CoLtd on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Pontex Polyblend CoLtd or generate 4.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Pontex Polyblend CoLtd  vs.  WinMate Communication INC

 Performance 
       Timeline  
Pontex Polyblend CoLtd 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Pontex Polyblend CoLtd are ranked lower than 11 (%) 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.
WinMate Communication INC 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, WinMate Communication is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pontex Polyblend and WinMate Communication Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pontex Polyblend and WinMate Communication

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

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