Correlation Between Construction and Post
Can any of the company-specific risk be diversified away by investing in both Construction and Post 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 Construction and Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction And Investment and Post and Telecommunications, you can compare the effects of market volatilities on Construction and Post 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 Construction with a short position of Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and Post.
Diversification Opportunities for Construction and Post
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Construction and Post is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and 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 Construction And Investment are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Construction i.e., Construction and Post go up and down completely randomly.
Pair Corralation between Construction and Post
Assuming the 90 days trading horizon Construction is expected to generate 2.62 times less return on investment than Post. But when comparing it to its historical volatility, Construction And Investment is 1.28 times less risky than Post. It trades about 0.07 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 452,000 in Post and Telecommunications on December 30, 2024 and sell it today you would earn a total of 118,000 from holding Post and Telecommunications or generate 26.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.33% |
Values | Daily Returns |
Construction And Investment vs. Post and Telecommunications
Performance |
Timeline |
Construction And Inv |
Post and Telecommuni |
Construction and Post Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Construction and Post
The main advantage of trading using opposite Construction and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, Post 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 Post will offset losses from the drop in Post's long position.Construction vs. Techno Agricultural Supplying | Construction vs. Kien Giang Construction | Construction vs. Viet Nam Construction | Construction vs. Techcom Vietnam REIT |
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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 Stocks Directory module to find actively traded stocks across global markets.
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