Correlation Between CEO Group and Mechanics Construction
Can any of the company-specific risk be diversified away by investing in both CEO Group and Mechanics 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 CEO Group and Mechanics Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEO Group JSC and Mechanics Construction and, you can compare the effects of market volatilities on CEO Group and Mechanics 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 CEO Group with a short position of Mechanics Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEO Group and Mechanics Construction.
Diversification Opportunities for CEO Group and Mechanics Construction
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEO and Mechanics is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Mechanics Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanics Construction and CEO Group 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 CEO Group JSC are associated (or correlated) with Mechanics Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechanics Construction has no effect on the direction of CEO Group i.e., CEO Group and Mechanics Construction go up and down completely randomly.
Pair Corralation between CEO Group and Mechanics Construction
Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Mechanics Construction. In addition to that, CEO Group is 1.44 times more volatile than Mechanics Construction and. It trades about -0.06 of its total potential returns per unit of risk. Mechanics Construction and is currently generating about 0.04 per unit of volatility. If you would invest 750,000 in Mechanics Construction and on September 14, 2024 and sell it today you would earn a total of 110,000 from holding Mechanics Construction and or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.51% |
| Values | Daily Returns |
CEO Group JSC vs. Mechanics Construction and
Performance |
| Timeline |
| CEO Group JSC |
| Mechanics Construction |
CEO Group and Mechanics Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEO Group and Mechanics Construction
The main advantage of trading using opposite CEO Group and Mechanics Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEO Group position performs unexpectedly, Mechanics 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 Mechanics Construction will offset losses from the drop in Mechanics Construction's long position.| CEO Group vs. Hai An Transport | CEO Group vs. Vietnam Dairy Products | CEO Group vs. Vu Dang Investment | CEO Group vs. HUD1 Investment and |
| Mechanics Construction vs. South Basic Chemicals | Mechanics Construction vs. Taseco Air Services | Mechanics Construction vs. Innovative Technology Development | Mechanics Construction vs. CEO Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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