Correlation Between Forth Public and Phatra Leasing

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

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

Diversification Opportunities for Forth Public and Phatra Leasing

0.42

Correlation Coefficient

Forth Public  Phatra Leasing

Very weak diversification

The 3 months correlation between Forth and Phatra is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Forth Public and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public and Forth Public 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 Forth Public are associated (or correlated) with Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Forth Public i.e., Forth Public and Phatra Leasing go up and down completely randomly.

Pair Corralation between Forth Public and Phatra Leasing

Assuming the 90 days trading horizon Forth Public is expected to under-perform the Phatra Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Forth Public is 2.0 times less risky than Phatra Leasing. The stock trades about -0.19 of its potential returns per unit of risk. The Phatra Leasing Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Phatra Leasing Public on April 23, 2025 and sell it today you would earn a total of  18.00  from holding Phatra Leasing Public or generate 17.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Forth Public  vs.  Phatra Leasing Public

Forth Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forth 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 August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Phatra Leasing Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Phatra Leasing Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Phatra Leasing disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forth Public and Phatra Leasing

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

The idea behind Forth Public and Phatra 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.