Correlation Between Da Nang and CEO Group

Can any of the company-specific risk be diversified away by investing in both Da Nang and CEO Group 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 Da Nang and CEO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Da Nang and CEO Group

0.12

Correlation Coefficient

Da Nang  CEO Group

Average diversification

The 3 months correlation between DXV and CEO is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Da Nang Construction and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and Da Nang 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 Da Nang Construction are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Da Nang i.e., Da Nang and CEO Group go up and down completely randomly.

Pair Corralation between Da Nang and CEO Group

Assuming the 90 days trading horizon Da Nang Construction is expected to generate 0.95 times more return on investment than CEO Group. However, Da Nang Construction is 1.06 times less risky than CEO Group. It trades about 0.09 of its potential returns per unit of risk. CEO Group JSC is currently generating about -0.66 per unit of risk. If you would invest  376,000  in Da Nang Construction on October 11, 2024 and sell it today you would earn a total of  9,000  from holding Da Nang Construction or generate 2.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Da Nang Construction  vs.  CEO Group JSC

Da Nang Construction

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Da Nang Construction are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Da Nang may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC 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 basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Da Nang and CEO Group

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

The idea behind Da Nang Construction and CEO Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.