Correlation Between Pontex Polyblend and WinMate Communication
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Pontex Polyblend CoLtd vs. WinMate Communication INC
Performance |
Timeline |
Pontex Polyblend CoLtd |
WinMate Communication INC |
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.Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. Yem Chio Co | Pontex Polyblend vs. Ocean Plastics Co | Pontex Polyblend vs. Formosan Rubber Group |
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Check out your portfolio center.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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