Correlation Between APG Securities and CMC Investment
Can any of the company-specific risk be diversified away by investing in both APG Securities and CMC Investment 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 APG Securities and CMC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APG Securities Joint and CMC Investment JSC, you can compare the effects of market volatilities on APG Securities and CMC Investment 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 APG Securities with a short position of CMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of APG Securities and CMC Investment.
Diversification Opportunities for APG Securities and CMC Investment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APG and CMC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding APG Securities Joint and CMC Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Investment JSC and APG Securities 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 APG Securities Joint are associated (or correlated) with CMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Investment JSC has no effect on the direction of APG Securities i.e., APG Securities and CMC Investment go up and down completely randomly.
Pair Corralation between APG Securities and CMC Investment
Assuming the 90 days trading horizon APG Securities Joint is expected to under-perform the CMC Investment. But the stock apears to be less risky and, when comparing its historical volatility, APG Securities Joint is 1.28 times less risky than CMC Investment. The stock trades about -0.53 of its potential returns per unit of risk. The CMC Investment JSC is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 600,000 in CMC Investment JSC on October 6, 2024 and sell it today you would lose (40,000) from holding CMC Investment JSC or give up 6.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 85.71% |
Values | Daily Returns |
APG Securities Joint vs. CMC Investment JSC
Performance |
Timeline |
APG Securities Joint |
CMC Investment JSC |
APG Securities and CMC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with APG Securities and CMC Investment
The main advantage of trading using opposite APG Securities and CMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APG Securities position performs unexpectedly, CMC Investment 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 CMC Investment will offset losses from the drop in CMC Investment's long position.APG Securities vs. Tin Nghia Industrial | APG Securities vs. Binh Duong Construction | APG Securities vs. Mechanics Construction and | APG Securities vs. SCG Construction JSC |
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Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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