Correlation Between Pha Lai and Agriculture Printing

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

By analyzing existing cross correlation between Pha Lai Thermal and Agriculture Printing and, you can compare the effects of market volatilities on Pha Lai and Agriculture Printing 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 Lai with a short position of Agriculture Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Agriculture Printing.

Diversification Opportunities for Pha Lai and Agriculture Printing

-0.17

Correlation Coefficient

Pha Lai  Agriculture Printing

Good diversification

The 3 months correlation between Pha and Agriculture is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and and Pha Lai 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 Lai Thermal are associated (or correlated) with Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Pha Lai i.e., Pha Lai and Agriculture Printing go up and down completely randomly.

Pair Corralation between Pha Lai and Agriculture Printing

Assuming the 90 days trading horizon Pha Lai Thermal is expected to generate 0.41 times more return on investment than Agriculture Printing. However, Pha Lai Thermal is 2.46 times less risky than Agriculture Printing. It trades about -0.01 of its potential returns per unit of risk. Agriculture Printing and is currently generating about -0.03 per unit of risk. If you would invest  1,138,336  in Pha Lai Thermal on October 27, 2024 and sell it today you would lose (8,336) from holding Pha Lai Thermal or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.81%
Values	Daily Returns

Pha Lai Thermal  vs.  Agriculture Printing and

Pha Lai Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Agriculture Printing and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agriculture Printing and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Agriculture Printing 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 Lai and Agriculture Printing

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

The idea behind Pha Lai Thermal and Agriculture Printing and 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.