Correlation Between Skardin Industrial and Tang Eng

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Can any of the company-specific risk be diversified away by investing in both Skardin Industrial and Tang Eng 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 Skardin Industrial and Tang Eng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skardin Industrial and Tang Eng Iron, you can compare the effects of market volatilities on Skardin Industrial and Tang Eng 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 Skardin Industrial with a short position of Tang Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skardin Industrial and Tang Eng.

Diversification Opportunities for Skardin Industrial and Tang Eng

SkardinTangDiversified AwaySkardinTangDiversified Away100%
0.37
  Correlation Coefficient

Weak diversification

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

Pair Corralation between Skardin Industrial and Tang Eng

Assuming the 90 days trading horizon Skardin Industrial is expected to generate 4.33 times more return on investment than Tang Eng. However, Skardin Industrial is 4.33 times more volatile than Tang Eng Iron. It trades about 0.02 of its potential returns per unit of risk. Tang Eng Iron is currently generating about -0.04 per unit of risk. If you would invest  5,730  in Skardin Industrial on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Skardin Industrial or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Skardin Industrial  vs.  Tang Eng Iron

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 010203040
JavaScript chart by amCharts 3.21.153466 2035
       Timeline  
Skardin Industrial 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Skardin Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Skardin Industrial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec5560657075808590
Tang Eng Iron 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tang Eng Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tang Eng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec30.53131.53232.53333.53434.535

Skardin Industrial and Tang Eng Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.56-9.41-6.26-3.10.03.116.289.4512.61 0.10.20.30.4
JavaScript chart by amCharts 3.21.153466 2035
       Returns  

Pair Trading with Skardin Industrial and Tang Eng

The main advantage of trading using opposite Skardin Industrial and Tang Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skardin Industrial position performs unexpectedly, Tang Eng 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 Tang Eng will offset losses from the drop in Tang Eng's long position.
The idea behind Skardin Industrial and Tang Eng Iron 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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