Correlation Between Da Cin and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Da Cin and Kedge Construction 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 Da Cin and Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and Kedge Construction Co, you can compare the effects of market volatilities on Da Cin and Kedge Construction 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 Da Cin with a short position of Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and Kedge Construction.
Diversification Opportunities for Da Cin and Kedge Construction
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 2535 and Kedge is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction and Da Cin 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 Da Cin Construction Co are associated (or correlated) with Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Da Cin i.e., Da Cin and Kedge Construction go up and down completely randomly.
Pair Corralation between Da Cin and Kedge Construction
Assuming the 90 days trading horizon Da Cin Construction Co is expected to under-perform the Kedge Construction. But the stock apears to be less risky and, when comparing its historical volatility, Da Cin Construction Co is 1.15 times less risky than Kedge Construction. The stock trades about 0.0 of its potential returns per unit of risk. The Kedge Construction Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,430 in Kedge Construction Co on August 29, 2024 and sell it today you would earn a total of 140.00 from holding Kedge Construction Co or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.62% |
| Values | Daily Returns |
Da Cin Construction Co vs. Kedge Construction Co
Performance |
| Timeline |
| Da Cin Construction |
| Kedge Construction |
Da Cin and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Cin and Kedge Construction
The main advantage of trading using opposite Da Cin and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| Da Cin vs. Yulon Motor Co | Da Cin vs. Far Eastern Department | Da Cin vs. China Steel Corp | Da Cin vs. Chang Hwa Commercial |
| Kedge Construction vs. Da Cin Construction Co | Kedge Construction vs. Kindom Construction Corp | Kedge Construction vs. Huaku Development Co | Kedge Construction vs. Highwealth Construction Corp |
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 Positions Ratings module to 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.
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