Correlation Between Phatra Leasing and Micro Leasing

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

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

Diversification Opportunities for Phatra Leasing and Micro Leasing

0.37

Correlation Coefficient

Phatra Leasing  Micro Leasing

Weak diversification

The 3 months correlation between Phatra and Micro is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Micro Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Leasing Public and Phatra Leasing 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 Phatra Leasing Public are associated (or correlated) with Micro Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Leasing Public has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Micro Leasing go up and down completely randomly.

Pair Corralation between Phatra Leasing and Micro Leasing

Assuming the 90 days horizon Phatra Leasing Public is expected to generate 0.26 times more return on investment than Micro Leasing. However, Phatra Leasing Public is 3.8 times less risky than Micro Leasing. It trades about -0.17 of its potential returns per unit of risk. Micro Leasing Public is currently generating about -0.09 per unit of risk. If you would invest  181.00  in Phatra Leasing Public on September 5, 2024 and sell it today you would lose (20.00) from holding Phatra Leasing Public or give up 11.05% of portfolio value over 90 days.

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

Phatra Leasing Public  vs.  Micro Leasing Public

Phatra Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phatra Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Micro Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micro Leasing 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 fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Phatra Leasing and Micro Leasing

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

The idea behind Phatra Leasing Public and Micro Leasing 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.