Correlation Between Mechanics Construction and Hanoi Beer
Can any of the company-specific risk be diversified away by investing in both Mechanics Construction and Hanoi Beer 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 Mechanics Construction and Hanoi Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Construction and and Hanoi Beer Alcohol, you can compare the effects of market volatilities on Mechanics Construction and Hanoi Beer 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 Mechanics Construction with a short position of Hanoi Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and Hanoi Beer.
Diversification Opportunities for Mechanics Construction and Hanoi Beer
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mechanics and Hanoi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and Hanoi Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Beer Alcohol and Mechanics 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 Mechanics Construction and are associated (or correlated) with Hanoi Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Beer Alcohol has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and Hanoi Beer go up and down completely randomly.
Pair Corralation between Mechanics Construction and Hanoi Beer
Assuming the 90 days trading horizon Mechanics Construction and is expected to generate 1.68 times more return on investment than Hanoi Beer. However, Mechanics Construction is 1.68 times more volatile than Hanoi Beer Alcohol. It trades about 0.04 of its potential returns per unit of risk. Hanoi Beer Alcohol is currently generating about -0.01 per unit of risk. If you would invest 641,788 in Mechanics Construction and on September 26, 2024 and sell it today you would earn a total of 218,212 from holding Mechanics Construction and or generate 34.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 93.9% |
Values | Daily Returns |
Mechanics Construction and vs. Hanoi Beer Alcohol
Performance |
Timeline |
Mechanics Construction |
Hanoi Beer Alcohol |
Mechanics Construction and Hanoi Beer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mechanics Construction and Hanoi Beer
The main advantage of trading using opposite Mechanics Construction and Hanoi Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Construction position performs unexpectedly, Hanoi Beer 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 Hanoi Beer will offset losses from the drop in Hanoi Beer's long position.Mechanics Construction vs. FIT INVEST JSC | Mechanics Construction vs. Damsan JSC | Mechanics Construction vs. An Phat Plastic | Mechanics Construction vs. Alphanam ME |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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