Correlation Between Telecoms Informatics and Pha Le

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

By analyzing existing cross correlation between Telecoms Informatics JSC and Pha Le Plastics, you can compare the effects of market volatilities on Telecoms Informatics and Pha Le 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 Telecoms Informatics with a short position of Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecoms Informatics and Pha Le.

Diversification Opportunities for Telecoms Informatics and Pha Le

-0.17

Correlation Coefficient

Telecoms Informatics  Pha Le

Good diversification

The 3 months correlation between Telecoms and Pha is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics and Telecoms Informatics 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 Telecoms Informatics JSC are associated (or correlated) with Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and Pha Le go up and down completely randomly.

Pair Corralation between Telecoms Informatics and Pha Le

Assuming the 90 days trading horizon Telecoms Informatics is expected to generate 1.03 times less return on investment than Pha Le. In addition to that, Telecoms Informatics is 1.02 times more volatile than Pha Le Plastics. It trades about 0.16 of its total potential returns per unit of risk. Pha Le Plastics is currently generating about 0.17 per unit of volatility. If you would invest  465,000  in Pha Le Plastics on October 10, 2024 and sell it today you would earn a total of  33,000  from holding Pha Le Plastics or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Telecoms Informatics JSC  vs.  Pha Le Plastics

Telecoms Informatics JSC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Telecoms Informatics JSC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Telecoms Informatics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pha Le Plastics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pha Le Plastics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Pha Le is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Telecoms Informatics and Pha Le

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

The idea behind Telecoms Informatics JSC and Pha Le Plastics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.