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
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 577 and SCG is 0.18. 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. But the stock apears to be less risky and, when comparing its historical volatility, 577 Investment Corp is 1.05 times less risky than SCG Construction. The stock trades about -0.04 of its potential returns per unit of risk. The SCG Construction JSC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,540,000 in SCG Construction JSC on December 27, 2024 and sell it today you would earn a total of 890,000 from holding SCG Construction JSC or generate 13.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
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. Vien Dong Investment | 577 Investment vs. Tri Viet Management | 577 Investment vs. Riverway Management JSC | 577 Investment vs. Nam Kim Steel |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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