Correlation Between Dexon Technology and Rojana Industrial

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

By analyzing existing cross correlation between Dexon Technology PCL and Rojana Industrial Park, you can compare the effects of market volatilities on Dexon Technology and Rojana Industrial 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 Dexon Technology with a short position of Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexon Technology and Rojana Industrial.

Diversification Opportunities for Dexon Technology and Rojana Industrial

0.71

Correlation Coefficient

Dexon Technology  Rojana Industrial

Poor diversification

The 3 months correlation between Dexon and Rojana is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dexon Technology PCL and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park and Dexon 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 Dexon Technology PCL are associated (or correlated) with Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of Dexon Technology i.e., Dexon Technology and Rojana Industrial go up and down completely randomly.

Pair Corralation between Dexon Technology and Rojana Industrial

Assuming the 90 days trading horizon Dexon Technology PCL is expected to generate 1.58 times more return on investment than Rojana Industrial. However, Dexon Technology is 1.58 times more volatile than Rojana Industrial Park. It trades about -0.04 of its potential returns per unit of risk. Rojana Industrial Park is currently generating about -0.2 per unit of risk. If you would invest  164.00  in Dexon Technology PCL on October 25, 2024 and sell it today you would lose (14.00) from holding Dexon Technology PCL or give up 8.54% of portfolio value over 90 days.

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

Dexon Technology PCL  vs.  Rojana Industrial Park

Dexon Technology PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dexon Technology PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Rojana Industrial Park

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rojana Industrial Park has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dexon Technology and Rojana Industrial

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

The idea behind Dexon Technology PCL and Rojana Industrial Park 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.