Correlation Between Halcyon Technology and Phatra Leasing

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

By analyzing existing cross correlation between Halcyon Technology Public and Phatra Leasing Public, you can compare the effects of market volatilities on Halcyon Technology and Phatra Leasing 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 Halcyon Technology with a short position of Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halcyon Technology and Phatra Leasing.

Diversification Opportunities for Halcyon Technology and Phatra Leasing

0.03

Correlation Coefficient

Halcyon Technology  Phatra Leasing

Significant diversification

The 3 months correlation between Halcyon and Phatra is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Halcyon Technology Public and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public and Halcyon 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 Halcyon Technology Public are associated (or correlated) with Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Halcyon Technology i.e., Halcyon Technology and Phatra Leasing go up and down completely randomly.

Pair Corralation between Halcyon Technology and Phatra Leasing

Assuming the 90 days trading horizon Halcyon Technology Public is expected to generate 1.35 times more return on investment than Phatra Leasing. However, Halcyon Technology is 1.35 times more volatile than Phatra Leasing Public. It trades about -0.02 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about -0.18 per unit of risk. If you would invest  358.00  in Halcyon Technology Public on December 30, 2024 and sell it today you would lose (38.00) from holding Halcyon Technology Public or give up 10.61% of portfolio value over 90 days.

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

Halcyon Technology Public  vs.  Phatra Leasing Public

Halcyon Technology Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halcyon Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Halcyon Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Phatra Leasing Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phatra Leasing Public 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Halcyon Technology and Phatra Leasing

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

The idea behind Halcyon Technology Public and Phatra Leasing Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.