Correlation Between Din Capital and Cuulong Fish

Can any of the company-specific risk be diversified away by investing in both Din Capital and Cuulong Fish 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 Din Capital and Cuulong Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Din Capital Investment and Cuulong Fish JSC, you can compare the effects of market volatilities on Din Capital and Cuulong Fish 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 Din Capital with a short position of Cuulong Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Cuulong Fish.

Diversification Opportunities for Din Capital and Cuulong Fish

-0.34

Correlation Coefficient

Din Capital  Cuulong Fish

Very good diversification

The 3 months correlation between Din and Cuulong is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Cuulong Fish JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuulong Fish JSC and Din Capital 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 Din Capital Investment are associated (or correlated) with Cuulong Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuulong Fish JSC has no effect on the direction of Din Capital i.e., Din Capital and Cuulong Fish go up and down completely randomly.

Pair Corralation between Din Capital and Cuulong Fish

Assuming the 90 days trading horizon Din Capital Investment is expected to generate 1.55 times more return on investment than Cuulong Fish. However, Din Capital is 1.55 times more volatile than Cuulong Fish JSC. It trades about 0.02 of its potential returns per unit of risk. Cuulong Fish JSC is currently generating about -0.01 per unit of risk. If you would invest  971,429  in Din Capital Investment on October 22, 2024 and sell it today you would earn a total of  48,571  from holding Din Capital Investment or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.37%
Values	Daily Returns

Din Capital Investment  vs.  Cuulong Fish JSC

Din Capital Investment

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Cuulong Fish JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cuulong Fish JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Cuulong Fish is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Din Capital and Cuulong Fish

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

The idea behind Din Capital Investment and Cuulong Fish 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.