Correlation Between Travel Investment and Mekong Fisheries

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

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

Diversification Opportunities for Travel Investment and Mekong Fisheries

0.3

Correlation Coefficient

Travel Investment  Mekong Fisheries

Weak diversification

The 3 months correlation between Travel and Mekong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Travel Investment and and Mekong Fisheries JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekong Fisheries JSC and Travel Investment 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 Travel Investment and are associated (or correlated) with Mekong Fisheries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mekong Fisheries JSC has no effect on the direction of Travel Investment i.e., Travel Investment and Mekong Fisheries go up and down completely randomly.

Pair Corralation between Travel Investment and Mekong Fisheries

Assuming the 90 days trading horizon Travel Investment and is expected to under-perform the Mekong Fisheries. But the stock apears to be less risky and, when comparing its historical volatility, Travel Investment and is 1.26 times less risky than Mekong Fisheries. The stock trades about -0.07 of its potential returns per unit of risk. The Mekong Fisheries JSC is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  800,000  in Mekong Fisheries JSC on September 30, 2024 and sell it today you would lose (75,000) from holding Mekong Fisheries JSC or give up 9.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.98%
Values	Daily Returns

Travel Investment and  vs.  Mekong Fisheries JSC

Travel Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Travel Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Travel Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mekong Fisheries JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mekong Fisheries JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Mekong Fisheries is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Travel Investment and Mekong Fisheries

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

The idea behind Travel Investment and and Mekong Fisheries JSC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.