Correlation Between Pha Le and Book

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

By analyzing existing cross correlation between Pha Le Plastics and Book And Educational, you can compare the effects of market volatilities on Pha Le and Book 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 Pha Le with a short position of Book. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Book.

Diversification Opportunities for Pha Le and Book

0.16

Correlation Coefficient

Pha Le  Book

Average diversification

The 3 months correlation between Pha and Book is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Book And Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Book And Educational and Pha Le 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 Pha Le Plastics are associated (or correlated) with Book. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Book And Educational has no effect on the direction of Pha Le i.e., Pha Le and Book go up and down completely randomly.

Pair Corralation between Pha Le and Book

Assuming the 90 days trading horizon Pha Le Plastics is expected to under-perform the Book. But the stock apears to be less risky and, when comparing its historical volatility, Pha Le Plastics is 2.41 times less risky than Book. The stock trades about -0.02 of its potential returns per unit of risk. The Book And Educational is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,730,000  in Book And Educational on September 21, 2024 and sell it today you would lose (30,000) from holding Book And Educational or give up 1.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	47.73%
Values	Daily Returns

Pha Le Plastics  vs.  Book And Educational

Pha Le Plastics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pha Le Plastics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Book And Educational

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Book And Educational has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Book is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pha Le and Book

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

The idea behind Pha Le Plastics and Book And Educational 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.