Correlation Between 2S Metal and Sena Development
Can any of the company-specific risk be diversified away by investing in both 2S Metal and Sena Development 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 Sena Development 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 Sena Development Public, you can compare the effects of market volatilities on 2S Metal and Sena Development 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 Sena Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Sena Development.
Diversification Opportunities for 2S Metal and Sena Development
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2S Metal and Sena is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Sena Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sena Development Public 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 Sena Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sena Development Public has no effect on the direction of 2S Metal i.e., 2S Metal and Sena Development go up and down completely randomly.
Pair Corralation between 2S Metal and Sena Development
Assuming the 90 days horizon 2S Metal Public is expected to under-perform the Sena Development. In addition to that, 2S Metal is 1.61 times more volatile than Sena Development Public. It trades about -0.17 of its total potential returns per unit of risk. Sena Development Public is currently generating about 0.0 per unit of volatility. If you would invest 228.00 in Sena Development Public on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Sena Development Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. Sena Development Public
Performance |
| Timeline |
| 2S Metal Public |
| Sena Development Public |
2S Metal and Sena Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and Sena Development
The main advantage of trading using opposite 2S Metal and Sena Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Sena Development 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 Sena Development will offset losses from the drop in Sena Development'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 |
| Sena Development vs. Wave Entertainment Public | Sena Development vs. Vibhavadi Medical Center | Sena Development vs. VGI Public | Sena Development vs. WHA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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