Correlation Between Ba Ria and DIC Holdings

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

By analyzing existing cross correlation between Ba Ria Thermal and DIC Holdings Construction, you can compare the effects of market volatilities on Ba Ria and DIC Holdings 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 Ba Ria with a short position of DIC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and DIC Holdings.

Diversification Opportunities for Ba Ria and DIC Holdings

-0.88

Correlation Coefficient

Ba Ria  DIC Holdings

Pay attention - limited upside

The 3 months correlation between BTP and DIC is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and DIC Holdings Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIC Holdings Construction and Ba Ria 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 Ba Ria Thermal are associated (or correlated) with DIC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIC Holdings Construction has no effect on the direction of Ba Ria i.e., Ba Ria and DIC Holdings go up and down completely randomly.

Pair Corralation between Ba Ria and DIC Holdings

Assuming the 90 days trading horizon Ba Ria Thermal is expected to generate 0.38 times more return on investment than DIC Holdings. However, Ba Ria Thermal is 2.65 times less risky than DIC Holdings. It trades about 0.0 of its potential returns per unit of risk. DIC Holdings Construction is currently generating about -0.01 per unit of risk. If you would invest  1,269,170  in Ba Ria Thermal on October 3, 2024 and sell it today you would lose (64,170) from holding Ba Ria Thermal or give up 5.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.24%
Values	Daily Returns

Ba Ria Thermal  vs.  DIC Holdings Construction

Ba Ria Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ba Ria Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

DIC Holdings Construction

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DIC Holdings Construction are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIC Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ba Ria and DIC Holdings

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

The idea behind Ba Ria Thermal and DIC Holdings Construction 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.