Correlation Between 1369 Construction and Transimex Transportation
Can any of the company-specific risk be diversified away by investing in both 1369 Construction and Transimex Transportation 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 Transimex Transportation 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 Transimex Transportation JSC, you can compare the effects of market volatilities on 1369 Construction and Transimex Transportation 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 Transimex Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1369 Construction and Transimex Transportation.
Diversification Opportunities for 1369 Construction and Transimex Transportation
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1369 and Transimex is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding 1369 Construction JSC and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation 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 Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of 1369 Construction i.e., 1369 Construction and Transimex Transportation go up and down completely randomly.
Pair Corralation between 1369 Construction and Transimex Transportation
Assuming the 90 days trading horizon 1369 Construction JSC is expected to under-perform the Transimex Transportation. But the stock apears to be less risky and, when comparing its historical volatility, 1369 Construction JSC is 1.67 times less risky than Transimex Transportation. The stock trades about -0.29 of its potential returns per unit of risk. The Transimex Transportation JSC is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,790,000 in Transimex Transportation JSC on August 31, 2024 and sell it today you would lose (80,000) from holding Transimex Transportation JSC or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
1369 Construction JSC vs. Transimex Transportation JSC
Performance |
| Timeline |
| 1369 Construction JSC |
| Transimex Transportation |
1369 Construction and Transimex Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1369 Construction and Transimex Transportation
The main advantage of trading using opposite 1369 Construction and Transimex Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1369 Construction position performs unexpectedly, Transimex Transportation 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 Transimex Transportation will offset losses from the drop in Transimex Transportation'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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