Correlation Between 577 Investment and SCG Construction
Can any of the company-specific risk be diversified away by investing in both 577 Investment and SCG Construction 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 577 Investment and SCG Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 577 Investment Corp and SCG Construction JSC, you can compare the effects of market volatilities on 577 Investment and SCG Construction 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 577 Investment with a short position of SCG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of 577 Investment and SCG Construction.
Diversification Opportunities for 577 Investment and SCG Construction
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 577 and SCG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding 577 Investment Corp and SCG Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG Construction JSC and 577 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 577 Investment Corp are associated (or correlated) with SCG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG Construction JSC has no effect on the direction of 577 Investment i.e., 577 Investment and SCG Construction go up and down completely randomly.
Pair Corralation between 577 Investment and SCG Construction
Assuming the 90 days trading horizon 577 Investment Corp is expected to under-perform the SCG Construction. In addition to that, 577 Investment is 4.77 times more volatile than SCG Construction JSC. It trades about -0.01 of its total potential returns per unit of risk. SCG Construction JSC is currently generating about 0.0 per unit of volatility. If you would invest 6,510,000 in SCG Construction JSC on December 4, 2024 and sell it today you would earn a total of 10,000 from holding SCG Construction JSC or generate 0.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
577 Investment Corp vs. SCG Construction JSC
Performance |
Timeline |
577 Investment Corp |
SCG Construction JSC |
577 Investment and SCG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 577 Investment and SCG Construction
The main advantage of trading using opposite 577 Investment and SCG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 577 Investment position performs unexpectedly, SCG Construction 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 SCG Construction will offset losses from the drop in SCG Construction's long position.577 Investment vs. Century Synthetic Fiber | 577 Investment vs. Hochiminh City Metal | 577 Investment vs. Transport and Industry | 577 Investment vs. Vietnam Petroleum Transport |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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