Correlation Between Panjawattana Plastic and Phol Dhanya

Can any of the company-specific risk be diversified away by investing in both Panjawattana Plastic and Phol Dhanya 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 Phol Dhanya 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 Phol Dhanya Public, you can compare the effects of market volatilities on Panjawattana Plastic and Phol Dhanya 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 Phol Dhanya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panjawattana Plastic and Phol Dhanya.

Diversification Opportunities for Panjawattana Plastic and Phol Dhanya

0.49

Correlation Coefficient

Panjawattana Plastic  Phol Dhanya

Very weak diversification

The 3 months correlation between Panjawattana and Phol is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Panjawattana Plastic Public and Phol Dhanya Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phol Dhanya 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 Phol Dhanya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phol Dhanya Public has no effect on the direction of Panjawattana Plastic i.e., Panjawattana Plastic and Phol Dhanya go up and down completely randomly.

Pair Corralation between Panjawattana Plastic and Phol Dhanya

Assuming the 90 days trading horizon Panjawattana Plastic is expected to generate 1.07 times less return on investment than Phol Dhanya. In addition to that, Panjawattana Plastic is 1.0 times more volatile than Phol Dhanya Public. It trades about 0.04 of its total potential returns per unit of risk. Phol Dhanya Public is currently generating about 0.04 per unit of volatility. If you would invest  251.00  in Phol Dhanya Public on September 14, 2024 and sell it today you would earn a total of  53.00  from holding Phol Dhanya Public or generate 21.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Panjawattana Plastic Public  vs.  Phol Dhanya 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.

Phol Dhanya Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phol Dhanya Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Phol Dhanya is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Panjawattana Plastic and Phol Dhanya

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

The idea behind Panjawattana Plastic Public and Phol Dhanya 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.