Correlation Between Peoples Garment and Pan Asia
Can any of the company-specific risk be diversified away by investing in both Peoples Garment and Pan Asia 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 Peoples Garment and Pan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Garment Public and Pan Asia Footwear, you can compare the effects of market volatilities on Peoples Garment and Pan Asia 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 Peoples Garment with a short position of Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Garment and Pan Asia.
Diversification Opportunities for Peoples Garment and Pan Asia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peoples and Pan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Garment Public and Pan Asia Footwear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Footwear and Peoples Garment 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 Peoples Garment Public are associated (or correlated) with Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Footwear has no effect on the direction of Peoples Garment i.e., Peoples Garment and Pan Asia go up and down completely randomly.
Pair Corralation between Peoples Garment and Pan Asia
Assuming the 90 days horizon Peoples Garment Public is expected to under-perform the Pan Asia. But the stock apears to be less risky and, when comparing its historical volatility, Peoples Garment Public is 1.71 times less risky than Pan Asia. The stock trades about -0.24 of its potential returns per unit of risk. The Pan Asia Footwear is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Pan Asia Footwear on December 27, 2024 and sell it today you would lose (11.00) from holding Pan Asia Footwear or give up 11.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Peoples Garment Public vs. Pan Asia Footwear
Performance |
Timeline |
Peoples Garment Public |
Pan Asia Footwear |
Peoples Garment and Pan Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peoples Garment and Pan Asia
The main advantage of trading using opposite Peoples Garment and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Garment position performs unexpectedly, Pan Asia 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 Pan Asia will offset losses from the drop in Pan Asia's long position.Peoples Garment vs. Ocean Glass Public | Peoples Garment vs. President Bakery Public | Peoples Garment vs. Pan Asia Footwear | Peoples Garment vs. Pato Chemical Industry |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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