Correlation Between South Basic and 1369 Construction
Can any of the company-specific risk be diversified away by investing in both South Basic and 1369 Construction 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 South Basic and 1369 Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and 1369 Construction JSC, you can compare the effects of market volatilities on South Basic and 1369 Construction 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 South Basic with a short position of 1369 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and 1369 Construction.
Diversification Opportunities for South Basic and 1369 Construction
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and 1369 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and 1369 Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1369 Construction JSC and South Basic 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 South Basic Chemicals are associated (or correlated) with 1369 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1369 Construction JSC has no effect on the direction of South Basic i.e., South Basic and 1369 Construction go up and down completely randomly.
Pair Corralation between South Basic and 1369 Construction
Assuming the 90 days trading horizon South Basic Chemicals is expected to generate 1.03 times more return on investment than 1369 Construction. However, South Basic is 1.03 times more volatile than 1369 Construction JSC. It trades about 0.1 of its potential returns per unit of risk. 1369 Construction JSC is currently generating about -0.06 per unit of risk. If you would invest 3,880,000 in South Basic Chemicals on October 3, 2024 and sell it today you would earn a total of 690,000 from holding South Basic Chemicals or generate 17.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
South Basic Chemicals vs. 1369 Construction JSC
Performance |
Timeline |
South Basic Chemicals |
1369 Construction JSC |
South Basic and 1369 Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with South Basic and 1369 Construction
The main advantage of trading using opposite South Basic and 1369 Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, 1369 Construction 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 1369 Construction will offset losses from the drop in 1369 Construction's long position.South Basic vs. Thanh Dat Investment | South Basic vs. Dinhvu Port Investment | South Basic vs. Danang Education Investment | South Basic vs. Vina2 Investment and |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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