Correlation Between 2S Metal and Regional Container
Can any of the company-specific risk be diversified away by investing in both 2S Metal and Regional Container 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 Regional Container 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 Regional Container Lines, you can compare the effects of market volatilities on 2S Metal and Regional Container 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 Regional Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Regional Container.
Diversification Opportunities for 2S Metal and Regional Container
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2S Metal and Regional is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Regional Container Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Container Lines 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 Regional Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Container Lines has no effect on the direction of 2S Metal i.e., 2S Metal and Regional Container go up and down completely randomly.
Pair Corralation between 2S Metal and Regional Container
Assuming the 90 days horizon 2S Metal Public is expected to under-perform the Regional Container. But the stock apears to be less risky and, when comparing its historical volatility, 2S Metal Public is 129.5 times less risky than Regional Container. The stock trades about -0.15 of its potential returns per unit of risk. The Regional Container Lines is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,408 in Regional Container Lines on September 13, 2024 and sell it today you would earn a total of 417.00 from holding Regional Container Lines or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
2S Metal Public vs. Regional Container Lines
Performance |
| Timeline |
| 2S Metal Public |
| Regional Container Lines |
2S Metal and Regional Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and Regional Container
The main advantage of trading using opposite 2S Metal and Regional Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Regional Container 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 Regional Container will offset losses from the drop in Regional Container's long position.| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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