Correlation Between Taseco Air and Pha Lai

Can any of the company-specific risk be diversified away by investing in both Taseco Air and Pha Lai 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 Taseco Air and Pha Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taseco Air Services and Pha Lai Thermal, you can compare the effects of market volatilities on Taseco Air and Pha Lai 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 Taseco Air with a short position of Pha Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taseco Air and Pha Lai.

Diversification Opportunities for Taseco Air and Pha Lai

-0.04

Correlation Coefficient

Taseco Air  Pha Lai

Good diversification

The 3 months correlation between Taseco and Pha is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Taseco Air Services and Pha Lai Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Lai Thermal and Taseco Air 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 Taseco Air Services are associated (or correlated) with Pha Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Lai Thermal has no effect on the direction of Taseco Air i.e., Taseco Air and Pha Lai go up and down completely randomly.

Pair Corralation between Taseco Air and Pha Lai

Assuming the 90 days trading horizon Taseco Air is expected to generate 1.31 times less return on investment than Pha Lai. But when comparing it to its historical volatility, Taseco Air Services is 1.06 times less risky than Pha Lai. It trades about 0.01 of its potential returns per unit of risk. Pha Lai Thermal is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,087,640  in Pha Lai Thermal on October 11, 2024 and sell it today you would earn a total of  2,360  from holding Pha Lai Thermal or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Taseco Air Services  vs.  Pha Lai Thermal

Taseco Air Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taseco Air Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Taseco Air is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pha Lai Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pha Lai Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Taseco Air and Pha Lai

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

The idea behind Taseco Air Services and Pha Lai Thermal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.