Correlation Between Bao Ngoc and Construction
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and Construction 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 Bao Ngoc and Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and Construction And Investment, you can compare the effects of market volatilities on Bao Ngoc and Construction 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 Bao Ngoc with a short position of Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and Construction.
Diversification Opportunities for Bao Ngoc and Construction
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bao and Construction is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and Construction And Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction And Inv and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction And Inv has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and Construction go up and down completely randomly.
Pair Corralation between Bao Ngoc and Construction
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to generate 1.53 times more return on investment than Construction. However, Bao Ngoc is 1.53 times more volatile than Construction And Investment. It trades about 0.02 of its potential returns per unit of risk. Construction And Investment is currently generating about 0.01 per unit of risk. If you would invest 944,000 in Bao Ngoc Investment on September 2, 2024 and sell it today you would earn a total of 16,000 from holding Bao Ngoc Investment or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Bao Ngoc Investment vs. Construction And Investment
Performance |
| Timeline |
| Bao Ngoc Investment |
| Construction And Inv |
Bao Ngoc and Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and Construction
The main advantage of trading using opposite Bao Ngoc and Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, Construction 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 Construction will offset losses from the drop in Construction's long position.| Bao Ngoc vs. Innovative Technology Development | Bao Ngoc vs. Saigon Viendong Technology | Bao Ngoc vs. Petrovietnam Drilling Mud | Bao Ngoc vs. Construction And Investment |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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