Correlation Between Construction JSC and SMC Investment
Can any of the company-specific risk be diversified away by investing in both Construction JSC and SMC 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 Construction JSC and SMC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction JSC No5 and SMC Investment Trading, you can compare the effects of market volatilities on Construction JSC and SMC 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 Construction JSC with a short position of SMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction JSC and SMC Investment.
Diversification Opportunities for Construction JSC and SMC Investment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Construction and SMC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Construction JSC No5 and SMC Investment Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Investment Trading and Construction JSC 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 Construction JSC No5 are associated (or correlated) with SMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Investment Trading has no effect on the direction of Construction JSC i.e., Construction JSC and SMC Investment go up and down completely randomly.
Pair Corralation between Construction JSC and SMC Investment
Assuming the 90 days trading horizon Construction JSC is expected to generate 1.47 times less return on investment than SMC Investment. In addition to that, Construction JSC is 1.47 times more volatile than SMC Investment Trading. It trades about 0.06 of its total potential returns per unit of risk. SMC Investment Trading is currently generating about 0.13 per unit of volatility. If you would invest 701,000 in SMC Investment Trading on October 7, 2024 and sell it today you would earn a total of 110,000 from holding SMC Investment Trading or generate 15.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 65.12% |
Values | Daily Returns |
Construction JSC No5 vs. SMC Investment Trading
Performance |
Timeline |
Construction JSC No5 |
SMC Investment Trading |
Construction JSC and SMC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Construction JSC and SMC Investment
The main advantage of trading using opposite Construction JSC and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction JSC position performs unexpectedly, SMC 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 SMC Investment will offset losses from the drop in SMC Investment's long position.Construction JSC vs. Tng Investment And | Construction JSC vs. Development Investment Construction | Construction JSC vs. Long Giang Investment | Construction JSC vs. Vincom Retail JSC |
SMC Investment vs. An Phat Plastic | SMC Investment vs. Pha Lai Thermal | SMC Investment vs. Phuoc Hoa Rubber | SMC Investment vs. Educational Book In |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Bonds Directory Find actively traded corporate debentures issued by US companies |