Correlation Between Phatra Leasing and Sun Vending

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

Diversification Opportunities for Phatra Leasing and Sun Vending

0.74

Correlation Coefficient

Phatra Leasing  Sun Vending

Poor diversification

The 3 months correlation between Phatra and Sun is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Sun Vending Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Vending Technology 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 Sun Vending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Vending Technology has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Sun Vending go up and down completely randomly.

Pair Corralation between Phatra Leasing and Sun Vending

Assuming the 90 days horizon Phatra Leasing Public is expected to under-perform the Sun Vending. In addition to that, Phatra Leasing is 1.8 times more volatile than Sun Vending Technology. It trades about -0.2 of its total potential returns per unit of risk. Sun Vending Technology is currently generating about -0.09 per unit of volatility. If you would invest  153.00  in Sun Vending Technology on December 3, 2024 and sell it today you would lose (14.00) from holding Sun Vending Technology or give up 9.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Phatra Leasing Public  vs.  Sun Vending Technology

Phatra Leasing Public

Risk-Adjusted Performance

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

Sun Vending Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Vending Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Phatra Leasing and Sun Vending

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

The idea behind Phatra Leasing Public and Sun Vending 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.