Correlation Between Panjawattana Plastic and Pico Public

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

Diversification Opportunities for Panjawattana Plastic and Pico Public

0.13

Correlation Coefficient

Panjawattana Plastic  Pico Public

Average diversification

The 3 months correlation between Panjawattana and Pico is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Panjawattana Plastic Public and Pico Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pico 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 Pico Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pico Public has no effect on the direction of Panjawattana Plastic i.e., Panjawattana Plastic and Pico Public go up and down completely randomly.

Pair Corralation between Panjawattana Plastic and Pico Public

Assuming the 90 days trading horizon Panjawattana Plastic Public is expected to under-perform the Pico Public. But the stock apears to be less risky and, when comparing its historical volatility, Panjawattana Plastic Public is 1.47 times less risky than Pico Public. The stock trades about -0.19 of its potential returns per unit of risk. The Pico Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  362.00  in Pico Public on September 14, 2024 and sell it today you would earn a total of  2.00  from holding Pico Public or generate 0.55% return on investment over 90 days.

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

Panjawattana Plastic Public  vs.  Pico 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.

Pico Public

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pico Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Pico 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 Pico Public

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

The idea behind Panjawattana Plastic Public and Pico 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.