Correlation Between Country Group and Pacific Pipe
Can any of the company-specific risk be diversified away by investing in both Country Group and Pacific Pipe 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 Country Group and Pacific Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Country Group Holdings and Pacific Pipe Public, you can compare the effects of market volatilities on Country Group and Pacific Pipe 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 Country Group with a short position of Pacific Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Group and Pacific Pipe.
Diversification Opportunities for Country Group and Pacific Pipe
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Country and Pacific is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Country Group Holdings and Pacific Pipe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Pipe Public and Country 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 Country Group Holdings are associated (or correlated) with Pacific Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Pipe Public has no effect on the direction of Country Group i.e., Country Group and Pacific Pipe go up and down completely randomly.
Pair Corralation between Country Group and Pacific Pipe
Assuming the 90 days trading horizon Country Group Holdings is expected to generate 23.2 times more return on investment than Pacific Pipe. However, Country Group is 23.2 times more volatile than Pacific Pipe Public. It trades about 0.07 of its potential returns per unit of risk. Pacific Pipe Public is currently generating about -0.03 per unit of risk. If you would invest 68.00 in Country Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Country Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Country Group Holdings vs. Pacific Pipe Public
Performance |
| Timeline |
| Country Group Holdings |
| Pacific Pipe Public |
Country Group and Pacific Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Group and Pacific Pipe
The main advantage of trading using opposite Country Group and Pacific Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Group position performs unexpectedly, Pacific Pipe 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 Pacific Pipe will offset losses from the drop in Pacific Pipe's long position.| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
| Pacific Pipe vs. TMT Steel Public | Pacific Pipe vs. MCS Steel Public | Pacific Pipe vs. KGI Securities Public | Pacific Pipe vs. Permsin Steel Works |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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