Correlation Between Moong Pattana and Premier Technology

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

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

Diversification Opportunities for Moong Pattana and Premier Technology

-0.64

Correlation Coefficient

Moong Pattana  Premier Technology

Excellent diversification

The 3 months correlation between Moong and Premier is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Moong Pattana International and Premier Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Technology Public and Moong Pattana 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 Moong Pattana International are associated (or correlated) with Premier Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Technology Public has no effect on the direction of Moong Pattana i.e., Moong Pattana and Premier Technology go up and down completely randomly.

Pair Corralation between Moong Pattana and Premier Technology

Assuming the 90 days trading horizon Moong Pattana International is expected to under-perform the Premier Technology. But the stock apears to be less risky and, when comparing its historical volatility, Moong Pattana International is 1.64 times less risky than Premier Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Premier Technology Public is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  848.00  in Premier Technology Public on December 30, 2024 and sell it today you would earn a total of  292.00  from holding Premier Technology Public or generate 34.43% return on investment over 90 days.

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

Moong Pattana International  vs.  Premier Technology Public

Moong Pattana Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moong Pattana International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.

Premier Technology Public

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Technology Public are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Premier Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moong Pattana and Premier Technology

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

The idea behind Moong Pattana International and Premier Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.