Correlation Between Pacific Construction and Trade Van
Can any of the company-specific risk be diversified away by investing in both Pacific Construction and Trade Van 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 Pacific Construction and Trade Van into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Construction Co and Trade Van Information Services, you can compare the effects of market volatilities on Pacific Construction and Trade Van 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 Pacific Construction with a short position of Trade Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Construction and Trade Van.
Diversification Opportunities for Pacific Construction and Trade Van
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pacific and Trade is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Construction Co and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van Information and Pacific 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 Pacific Construction Co are associated (or correlated) with Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of Pacific Construction i.e., Pacific Construction and Trade Van go up and down completely randomly.
Pair Corralation between Pacific Construction and Trade Van
Assuming the 90 days trading horizon Pacific Construction Co is expected to generate 0.42 times more return on investment than Trade Van. However, Pacific Construction Co is 2.37 times less risky than Trade Van. It trades about 0.22 of its potential returns per unit of risk. Trade Van Information Services is currently generating about 0.03 per unit of risk. If you would invest 1,110 in Pacific Construction Co on November 28, 2024 and sell it today you would earn a total of 55.00 from holding Pacific Construction Co or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Construction Co vs. Trade Van Information Services
Performance |
| Timeline |
| Pacific Construction |
| Trade Van Information |
Pacific Construction and Trade Van Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Construction and Trade Van
The main advantage of trading using opposite Pacific Construction and Trade Van positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Construction position performs unexpectedly, Trade Van 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 Trade Van will offset losses from the drop in Trade Van's long position.| Pacific Construction vs. Cathay Real Estate | Pacific Construction vs. Goldsun Building Materials | Pacific Construction vs. Kindom Construction Corp | Pacific Construction vs. Prince Housing Development |
| Trade Van vs. Taiwan Sakura Corp | Trade Van vs. Charoen Pokphand Enterprise | Trade Van vs. Taiwan Cogeneration Corp | Trade Van vs. Taiwan Secom Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |