Correlation Between President Securities and Concord Securities
Can any of the company-specific risk be diversified away by investing in both President Securities and Concord Securities 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 President Securities and Concord Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Securities Corp and Concord Securities Co, you can compare the effects of market volatilities on President Securities and Concord Securities 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 President Securities with a short position of Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Securities and Concord Securities.
Diversification Opportunities for President Securities and Concord Securities
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between President and Concord is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding President Securities Corp and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and President Securities 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 President Securities Corp are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of President Securities i.e., President Securities and Concord Securities go up and down completely randomly.
Pair Corralation between President Securities and Concord Securities
Assuming the 90 days trading horizon President Securities is expected to generate 3.9 times less return on investment than Concord Securities. But when comparing it to its historical volatility, President Securities Corp is 7.49 times less risky than Concord Securities. It trades about 0.07 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 951.00 in Concord Securities Co on August 26, 2024 and sell it today you would earn a total of 444.00 from holding Concord Securities Co or generate 46.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Securities Corp vs. Concord Securities Co
Performance |
| Timeline |
| President Securities Corp |
| Concord Securities |
President Securities and Concord Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Securities and Concord Securities
The main advantage of trading using opposite President Securities and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Securities position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' long position.| President Securities vs. Yuanta Financial Holdings | President Securities vs. IBF Financial Holdings | President Securities vs. China Development Financial | President Securities vs. Taiwan Business Bank |
| Concord Securities vs. Hung Sheng Construction | Concord Securities vs. Mercuries Life Insurance | Concord Securities vs. Sinher Technology | Concord Securities vs. YungShin Global Holding |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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