Correlation Between Pontex Polyblend and Progate

Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and Progate 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 Progate 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 Progate Group, you can compare the effects of market volatilities on Pontex Polyblend and Progate 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 Progate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and Progate.

Diversification Opportunities for Pontex Polyblend and Progate

-0.02

Correlation Coefficient

Pontex Polyblend  Progate

Good diversification

The 3 months correlation between Pontex and Progate is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and Progate Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progate Group 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 Progate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progate Group has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and Progate go up and down completely randomly.

Pair Corralation between Pontex Polyblend and Progate

Assuming the 90 days trading horizon Pontex Polyblend is expected to generate 15.02 times less return on investment than Progate. But when comparing it to its historical volatility, Pontex Polyblend CoLtd is 1.5 times less risky than Progate. It trades about 0.01 of its potential returns per unit of risk. Progate Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  15,800  in Progate Group on December 5, 2024 and sell it today you would earn a total of  2,150  from holding Progate Group or generate 13.61% return on investment over 90 days.

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

Pontex Polyblend CoLtd  vs.  Progate Group

Pontex Polyblend CoLtd

Risk-Adjusted Performance

Very Weak

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

Progate Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Progate Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Progate showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pontex Polyblend and Progate

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

The idea behind Pontex Polyblend CoLtd and Progate Group 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.