Correlation Between Phatra Leasing and Halcyon Technology

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

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

Diversification Opportunities for Phatra Leasing and Halcyon Technology

0.1

Correlation Coefficient

Phatra Leasing  Halcyon Technology

Average diversification

The 3 months correlation between Phatra and Halcyon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public and Phatra Leasing 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 Phatra Leasing Public are associated (or correlated) with Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Halcyon Technology go up and down completely randomly.

Pair Corralation between Phatra Leasing and Halcyon Technology

Assuming the 90 days horizon Phatra Leasing Public is expected to under-perform the Halcyon Technology. But the stock apears to be less risky and, when comparing its historical volatility, Phatra Leasing Public is 3.27 times less risky than Halcyon Technology. The stock trades about -0.2 of its potential returns per unit of risk. The Halcyon Technology Public is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  418.00  in Halcyon Technology Public on September 13, 2024 and sell it today you would lose (16.00) from holding Halcyon Technology Public or give up 3.83% of portfolio value over 90 days.

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

Phatra Leasing Public  vs.  Halcyon Technology Public

Phatra Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phatra Leasing 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.

Halcyon Technology Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halcyon Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Halcyon Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Phatra Leasing and Halcyon Technology

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

The idea behind Phatra Leasing Public and Halcyon 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.