Correlation Between Cotec Construction and Tng Investment

Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Tng 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 Cotec Construction and Tng Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cotec Construction JSC and Tng Investment And, you can compare the effects of market volatilities on Cotec Construction and Tng 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 Cotec Construction with a short position of Tng Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Tng Investment.

Diversification Opportunities for Cotec Construction and Tng Investment

-0.74

Correlation Coefficient

Cotec Construction  Tng Investment

Pay attention - limited upside

The 3 months correlation between Cotec and Tng is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And and Cotec Construction 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 Cotec Construction JSC are associated (or correlated) with Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of Cotec Construction i.e., Cotec Construction and Tng Investment go up and down completely randomly.

Pair Corralation between Cotec Construction and Tng Investment

Assuming the 90 days trading horizon Cotec Construction JSC is expected to generate 1.9 times more return on investment than Tng Investment. However, Cotec Construction is 1.9 times more volatile than Tng Investment And. It trades about 0.21 of its potential returns per unit of risk. Tng Investment And is currently generating about -0.2 per unit of risk. If you would invest  6,630,300  in Cotec Construction JSC on December 20, 2024 and sell it today you would earn a total of  2,059,700  from holding Cotec Construction JSC or generate 31.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cotec Construction JSC  vs.  Tng Investment And

Cotec Construction JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cotec Construction JSC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Cotec Construction displayed solid returns over the last few months and may actually be approaching a breakup point.

Tng Investment And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tng Investment And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cotec Construction and Tng Investment

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

The idea behind Cotec Construction JSC and Tng Investment And 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.