Correlation Between Picomat Plastic and Pha Le

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

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

Diversification Opportunities for Picomat Plastic and Pha Le

-0.08

Correlation Coefficient

Picomat Plastic  Pha Le

Good diversification

The 3 months correlation between Picomat and Pha is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Picomat Plastic 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 Picomat Plastic 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 Picomat Plastic 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 Picomat Plastic i.e., Picomat Plastic and Pha Le go up and down completely randomly.

Pair Corralation between Picomat Plastic and Pha Le

Assuming the 90 days trading horizon Picomat Plastic is expected to generate 4.36 times less return on investment than Pha Le. But when comparing it to its historical volatility, Picomat Plastic JSC is 2.11 times less risky than Pha Le. It trades about 0.08 of its potential returns per unit of risk. Pha Le Plastics is currently generating about 0.17 of returns per unit of risk over similar time horizon. 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	100.0%
Values	Daily Returns

Picomat Plastic JSC  vs.  Pha Le Plastics

Picomat Plastic JSC

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Picomat Plastic JSC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Picomat Plastic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unfluctuating basic indicators, Pha Le may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Picomat Plastic and Pha Le

The main advantage of trading using opposite Picomat Plastic and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picomat Plastic 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 Picomat Plastic 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.