Correlation Between Mekong Fisheries and Development Investment
Can any of the company-specific risk be diversified away by investing in both Mekong Fisheries and Development Investment 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 Mekong Fisheries and Development Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekong Fisheries JSC and Development Investment Construction, you can compare the effects of market volatilities on Mekong Fisheries and Development Investment 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 Mekong Fisheries with a short position of Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Development Investment.
Diversification Opportunities for Mekong Fisheries and Development Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mekong and Development is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Development Investment go up and down completely randomly.
Pair Corralation between Mekong Fisheries and Development Investment
Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to under-perform the Development Investment. But the stock apears to be less risky and, when comparing its historical volatility, Mekong Fisheries JSC is 1.2 times less risky than Development Investment. The stock trades about -0.03 of its potential returns per unit of risk. The Development Investment Construction is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,745,000 in Development Investment Construction on November 29, 2024 and sell it today you would earn a total of 240,000 from holding Development Investment Construction or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Mekong Fisheries JSC vs. Development Investment Constru
Performance |
| Timeline |
| Mekong Fisheries JSC |
| Development Investment |
Mekong Fisheries and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekong Fisheries and Development Investment
The main advantage of trading using opposite Mekong Fisheries and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekong Fisheries position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Mekong Fisheries vs. Transimex Transportation JSC | Mekong Fisheries vs. Transport and Industry | Mekong Fisheries vs. Fecon Mining JSC | Mekong Fisheries vs. DOMESCO Medical Import |
| Development Investment vs. South Books Educational | Development Investment vs. Petrolimex Insurance Corp | Development Investment vs. Saigon Beer Alcohol | Development Investment vs. Fecon Mining JSC |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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