Correlation Between Phatra Leasing and Professional Waste

Can any of the company-specific risk be diversified away by investing in both Phatra Leasing and Professional Waste 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 Professional Waste 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 Professional Waste Technology, you can compare the effects of market volatilities on Phatra Leasing and Professional Waste 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 Professional Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phatra Leasing and Professional Waste.

Diversification Opportunities for Phatra Leasing and Professional Waste

0.48

Correlation Coefficient

Phatra Leasing  Professional Waste

Very weak diversification

The 3 months correlation between Phatra and Professional is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Professional Waste Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Waste 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 Professional Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Waste has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Professional Waste go up and down completely randomly.

Pair Corralation between Phatra Leasing and Professional Waste

Assuming the 90 days horizon Phatra Leasing Public is expected to generate 0.03 times more return on investment than Professional Waste. However, Phatra Leasing Public is 37.54 times less risky than Professional Waste. It trades about -0.14 of its potential returns per unit of risk. Professional Waste Technology is currently generating about -0.11 per unit of risk. If you would invest  150.00  in Phatra Leasing Public on October 24, 2024 and sell it today you would lose (5.00) from holding Phatra Leasing Public or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.0%
Values	Daily Returns

Phatra Leasing Public  vs.  Professional Waste Technology

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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Professional Waste

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Professional Waste Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Phatra Leasing and Professional Waste

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

The idea behind Phatra Leasing Public and Professional Waste Technology 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.