Correlation Between Post and CEO Group
Can any of the company-specific risk be diversified away by investing in both Post and CEO Group 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 Post and CEO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and CEO Group JSC, you can compare the effects of market volatilities on Post and CEO Group 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 Post with a short position of CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and CEO Group.
Diversification Opportunities for Post and CEO Group
Poor diversification
The 3 months correlation between Post and CEO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and Post 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 Post and Telecommunications are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Post i.e., Post and CEO Group go up and down completely randomly.
Pair Corralation between Post and CEO Group
Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 1.33 times more return on investment than CEO Group. However, Post is 1.33 times more volatile than CEO Group JSC. It trades about 0.37 of its potential returns per unit of risk. CEO Group JSC is currently generating about 0.31 per unit of risk. If you would invest 439,000 in Post and Telecommunications on December 5, 2024 and sell it today you would earn a total of 121,000 from holding Post and Telecommunications or generate 27.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Post and Telecommunications vs. CEO Group JSC
Performance |
Timeline |
Post and Telecommuni |
CEO Group JSC |
Post and CEO Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Post and CEO Group
The main advantage of trading using opposite Post and CEO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, CEO Group 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 CEO Group will offset losses from the drop in CEO Group's long position.Post vs. SCG Construction JSC | Post vs. Transport and Industry | Post vs. Saigon Viendong Technology | Post vs. Development Investment Construction |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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