Correlation Between SCG Construction and Petrolimex Information
Can any of the company-specific risk be diversified away by investing in both SCG Construction and Petrolimex Information 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 SCG Construction and Petrolimex Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Construction JSC and Petrolimex Information Technology, you can compare the effects of market volatilities on SCG Construction and Petrolimex Information 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 SCG Construction with a short position of Petrolimex Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and Petrolimex Information.
Diversification Opportunities for SCG Construction and Petrolimex Information
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCG and Petrolimex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and Petrolimex Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrolimex Information and SCG Construction 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 SCG Construction JSC are associated (or correlated) with Petrolimex Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrolimex Information has no effect on the direction of SCG Construction i.e., SCG Construction and Petrolimex Information go up and down completely randomly.
Pair Corralation between SCG Construction and Petrolimex Information
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.12 times more return on investment than Petrolimex Information. However, SCG Construction JSC is 8.29 times less risky than Petrolimex Information. It trades about -0.01 of its potential returns per unit of risk. Petrolimex Information Technology is currently generating about -0.06 per unit of risk. If you would invest 6,540,000 in SCG Construction JSC on September 15, 2024 and sell it today you would lose (20,000) from holding SCG Construction JSC or give up 0.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 72.31% |
Values | Daily Returns |
SCG Construction JSC vs. Petrolimex Information Technol
Performance |
Timeline |
SCG Construction JSC |
Petrolimex Information |
SCG Construction and Petrolimex Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SCG Construction and Petrolimex Information
The main advantage of trading using opposite SCG Construction and Petrolimex Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, Petrolimex Information 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 Petrolimex Information will offset losses from the drop in Petrolimex Information's long position.SCG Construction vs. DOMESCO Medical Import | SCG Construction vs. FPT Digital Retail | SCG Construction vs. Book And Educational | SCG Construction vs. Ha Noi Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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