Correlation Between 1369 Construction and Song Hong
Can any of the company-specific risk be diversified away by investing in both 1369 Construction and Song Hong 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 1369 Construction and Song Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1369 Construction JSC and Song Hong Aluminum, you can compare the effects of market volatilities on 1369 Construction and Song Hong 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 1369 Construction with a short position of Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1369 Construction and Song Hong.
Diversification Opportunities for 1369 Construction and Song Hong
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 1369 and Song is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding 1369 Construction JSC and Song Hong Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Aluminum and 1369 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 1369 Construction JSC are associated (or correlated) with Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Aluminum has no effect on the direction of 1369 Construction i.e., 1369 Construction and Song Hong go up and down completely randomly.
Pair Corralation between 1369 Construction and Song Hong
Assuming the 90 days trading horizon 1369 Construction JSC is expected to generate 0.59 times more return on investment than Song Hong. However, 1369 Construction JSC is 1.69 times less risky than Song Hong. It trades about -0.09 of its potential returns per unit of risk. Song Hong Aluminum is currently generating about -0.07 per unit of risk. If you would invest 680,000 in 1369 Construction JSC on September 3, 2024 and sell it today you would lose (20,000) from holding 1369 Construction JSC or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
1369 Construction JSC vs. Song Hong Aluminum
Performance |
| Timeline |
| 1369 Construction JSC |
| Song Hong Aluminum |
1369 Construction and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1369 Construction and Song Hong
The main advantage of trading using opposite 1369 Construction and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1369 Construction position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| 1369 Construction vs. FIT INVEST JSC | 1369 Construction vs. Damsan JSC | 1369 Construction vs. An Phat Plastic | 1369 Construction vs. Alphanam ME |
| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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