Correlation Between 2S Metal and Capital Engineering
Can any of the company-specific risk be diversified away by investing in both 2S Metal and Capital Engineering 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 2S Metal and Capital Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and Capital Engineering Network, you can compare the effects of market volatilities on 2S Metal and Capital Engineering 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 2S Metal with a short position of Capital Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Capital Engineering.
Diversification Opportunities for 2S Metal and Capital Engineering
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2S Metal and Capital is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Capital Engineering Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Engineering and 2S Metal 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 2S Metal Public are associated (or correlated) with Capital Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Engineering has no effect on the direction of 2S Metal i.e., 2S Metal and Capital Engineering go up and down completely randomly.
Pair Corralation between 2S Metal and Capital Engineering
Assuming the 90 days horizon 2S Metal is expected to generate 97.9 times less return on investment than Capital Engineering. But when comparing it to its historical volatility, 2S Metal Public is 41.04 times less risky than Capital Engineering. It trades about 0.02 of its potential returns per unit of risk. Capital Engineering Network is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Capital Engineering Network on August 30, 2024 and sell it today you would lose (81.00) from holding Capital Engineering Network or give up 28.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. Capital Engineering Network
Performance |
| Timeline |
| 2S Metal Public |
| Capital Engineering |
2S Metal and Capital Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and Capital Engineering
The main advantage of trading using opposite 2S Metal and Capital Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Capital Engineering 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 Capital Engineering will offset losses from the drop in Capital Engineering's long position.| 2S Metal vs. MCS Steel Public | 2S Metal vs. Hwa Fong Rubber | 2S Metal vs. Haad Thip Public | 2S Metal vs. SCG PACKAGING PCL NVDR |
| Capital Engineering vs. 2S Metal Public | Capital Engineering vs. AAPICO Hitech Public | Capital Engineering vs. AJ Plast Public |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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