Correlation Between POST TELECOMMU and Development Investment

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

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

Diversification Opportunities for POST TELECOMMU and Development Investment

-0.45

Correlation Coefficient

POST TELECOMMU  Development Investment

Very good diversification

The 3 months correlation between POST and Development is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding POST TELECOMMU and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of POST TELECOMMU i.e., POST TELECOMMU and Development Investment go up and down completely randomly.

Pair Corralation between POST TELECOMMU and Development Investment

Assuming the 90 days trading horizon POST TELECOMMU is expected to generate 0.97 times more return on investment than Development Investment. However, POST TELECOMMU is 1.04 times less risky than Development Investment. It trades about 0.07 of its potential returns per unit of risk. Development Investment Construction is currently generating about -0.01 per unit of risk. If you would invest  2,930,000  in POST TELECOMMU on September 15, 2024 and sell it today you would earn a total of  250,000  from holding POST TELECOMMU or generate 8.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.08%
Values	Daily Returns

POST TELECOMMU  vs.  Development Investment Constru

POST TELECOMMU

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in POST TELECOMMU are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, POST TELECOMMU displayed solid returns over the last few months and may actually be approaching a breakup point.

Development Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with POST TELECOMMU and Development Investment

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

The idea behind POST TELECOMMU and Development Investment Construction 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.