Correlation Between Permsin Steel and Patkol Public

Can any of the company-specific risk be diversified away by investing in both Permsin Steel and Patkol Public 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 Permsin Steel and Patkol Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Permsin Steel and Patkol Public

0.82

Correlation Coefficient

Permsin Steel  Patkol Public

Very poor diversification

The 3 months correlation between Permsin and Patkol is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Permsin Steel Works and Patkol Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patkol Public and Permsin Steel 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 Permsin Steel Works are associated (or correlated) with Patkol Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patkol Public has no effect on the direction of Permsin Steel i.e., Permsin Steel and Patkol Public go up and down completely randomly.

Pair Corralation between Permsin Steel and Patkol Public

Assuming the 90 days trading horizon Permsin Steel Works is expected to generate 0.85 times more return on investment than Patkol Public. However, Permsin Steel Works is 1.18 times less risky than Patkol Public. It trades about -0.11 of its potential returns per unit of risk. Patkol Public is currently generating about -0.16 per unit of risk. If you would invest  77.00  in Permsin Steel Works on September 4, 2024 and sell it today you would lose (14.00) from holding Permsin Steel Works or give up 18.18% of portfolio value over 90 days.

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

Permsin Steel Works  vs.  Patkol Public

Permsin Steel Works

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Permsin Steel Works 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Patkol Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patkol 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Permsin Steel and Patkol Public

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

The idea behind Permsin Steel Works and Patkol 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.