Correlation Between Polyplex (Thailand) and Zeon

Can any of the company-specific risk be diversified away by investing in both Polyplex (Thailand) and Zeon 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 Polyplex (Thailand) and Zeon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polyplex Public and Zeon Corporation, you can compare the effects of market volatilities on Polyplex (Thailand) and Zeon 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 Polyplex (Thailand) with a short position of Zeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polyplex (Thailand) and Zeon.

Diversification Opportunities for Polyplex (Thailand) and Zeon

0.65

Correlation Coefficient

Polyplex (Thailand)  Zeon

Poor diversification

The 3 months correlation between Polyplex and Zeon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Polyplex Public and Zeon Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeon and Polyplex (Thailand) 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 Polyplex Public are associated (or correlated) with Zeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeon has no effect on the direction of Polyplex (Thailand) i.e., Polyplex (Thailand) and Zeon go up and down completely randomly.

Pair Corralation between Polyplex (Thailand) and Zeon

Assuming the 90 days horizon Polyplex Public is expected to generate 3.21 times more return on investment than Zeon. However, Polyplex (Thailand) is 3.21 times more volatile than Zeon Corporation. It trades about 0.04 of its potential returns per unit of risk. Zeon Corporation is currently generating about 0.01 per unit of risk. If you would invest  21.00  in Polyplex Public on September 23, 2024 and sell it today you would earn a total of  10.00  from holding Polyplex Public or generate 47.62% return on investment over 90 days.

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

Polyplex Public  vs.  Zeon Corp.

Polyplex (Thailand)

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polyplex Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Polyplex (Thailand) reported solid returns over the last few months and may actually be approaching a breakup point.

Zeon

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zeon Corporation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zeon may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Polyplex (Thailand) and Zeon

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

The idea behind Polyplex Public and Zeon Corporation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.