Correlation Between Panjawattana Plastic and Prodigy Public

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

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

Diversification Opportunities for Panjawattana Plastic and Prodigy Public

0.22

Correlation Coefficient

Panjawattana Plastic  Prodigy Public

Modest diversification

The 3 months correlation between Panjawattana and Prodigy is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Panjawattana Plastic Public and Prodigy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Public and Panjawattana Plastic 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 Panjawattana Plastic Public are associated (or correlated) with Prodigy Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Public has no effect on the direction of Panjawattana Plastic i.e., Panjawattana Plastic and Prodigy Public go up and down completely randomly.

Pair Corralation between Panjawattana Plastic and Prodigy Public

Assuming the 90 days trading horizon Panjawattana Plastic is expected to generate 1.04 times less return on investment than Prodigy Public. But when comparing it to its historical volatility, Panjawattana Plastic Public is 1.0 times less risky than Prodigy Public. It trades about 0.04 of its potential returns per unit of risk. Prodigy Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  322.00  in Prodigy Public on September 14, 2024 and sell it today you would lose (52.00) from holding Prodigy Public or give up 16.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.17%
Values	Daily Returns

Panjawattana Plastic Public  vs.  Prodigy Public

Panjawattana Plastic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panjawattana Plastic 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 basic indicators 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.

Prodigy Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodigy Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Prodigy Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Panjawattana Plastic and Prodigy Public

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

The idea behind Panjawattana Plastic Public and Prodigy 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.