Correlation Between Sunway Construction and Diversified Gateway
Can any of the company-specific risk be diversified away by investing in both Sunway Construction and Diversified Gateway 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 Sunway Construction and Diversified Gateway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and Diversified Gateway Solutions, you can compare the effects of market volatilities on Sunway Construction and Diversified Gateway 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 Sunway Construction with a short position of Diversified Gateway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and Diversified Gateway.
Diversification Opportunities for Sunway Construction and Diversified Gateway
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunway and Diversified is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group and Diversified Gateway Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Gateway and Sunway Construction 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 Sunway Construction Group are associated (or correlated) with Diversified Gateway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Gateway has no effect on the direction of Sunway Construction i.e., Sunway Construction and Diversified Gateway go up and down completely randomly.
Pair Corralation between Sunway Construction and Diversified Gateway
Assuming the 90 days trading horizon Sunway Construction Group is expected to generate 0.52 times more return on investment than Diversified Gateway. However, Sunway Construction Group is 1.94 times less risky than Diversified Gateway. It trades about 0.09 of its potential returns per unit of risk. Diversified Gateway Solutions is currently generating about -0.08 per unit of risk. If you would invest 415.00 in Sunway Construction Group on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Sunway Construction Group or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. Diversified Gateway Solutions
Performance |
| Timeline |
| Sunway Construction |
| Diversified Gateway |
Sunway Construction and Diversified Gateway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and Diversified Gateway
The main advantage of trading using opposite Sunway Construction and Diversified Gateway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction position performs unexpectedly, Diversified Gateway 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 Diversified Gateway will offset losses from the drop in Diversified Gateway's long position.| Sunway Construction vs. Rubberex M | Sunway Construction vs. SSF Home Group | Sunway Construction vs. Homeritz Bhd | Sunway Construction vs. Senheng New Retail |
| Diversified Gateway vs. Cosmos Technology International | Diversified Gateway vs. Cloudpoint Technology Berhad | Diversified Gateway vs. EA Technique M | Diversified Gateway vs. Choo Bee Metal |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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