Correlation Between POST TELECOMMU and Industrial Urban

Can any of the company-specific risk be diversified away by investing in both POST TELECOMMU and Industrial Urban 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 TELECOMMU and Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between POST TELECOMMU and Industrial Urban Development, you can compare the effects of market volatilities on POST TELECOMMU and Industrial Urban 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 TELECOMMU with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of POST TELECOMMU and Industrial Urban.

Diversification Opportunities for POST TELECOMMU and Industrial Urban

0.31

Correlation Coefficient

POST TELECOMMU  Industrial Urban

Weak diversification

The 3 months correlation between POST and Industrial is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding POST TELECOMMU and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and POST TELECOMMU 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 TELECOMMU are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of POST TELECOMMU i.e., POST TELECOMMU and Industrial Urban go up and down completely randomly.

Pair Corralation between POST TELECOMMU and Industrial Urban

Assuming the 90 days trading horizon POST TELECOMMU is expected to generate 37.46 times less return on investment than Industrial Urban. In addition to that, POST TELECOMMU is 1.1 times more volatile than Industrial Urban Development. It trades about 0.01 of its total potential returns per unit of risk. Industrial Urban Development is currently generating about 0.33 per unit of volatility. If you would invest  3,160,000  in Industrial Urban Development on December 30, 2024 and sell it today you would earn a total of  1,080,000  from holding Industrial Urban Development or generate 34.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

POST TELECOMMU  vs.  Industrial Urban Development

POST TELECOMMU

Risk-Adjusted Performance

Very Weak

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

Industrial Urban Dev

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Urban Development are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Industrial Urban displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with POST TELECOMMU and Industrial Urban

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

The idea behind POST TELECOMMU and Industrial Urban Development 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.