Correlation Between Kien Giang and Development Investment
Can any of the company-specific risk be diversified away by investing in both Kien Giang and Development Investment 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 Kien Giang and Development Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kien Giang Construction and Development Investment Construction, you can compare the effects of market volatilities on Kien Giang and Development Investment 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 Kien Giang with a short position of Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kien Giang and Development Investment.
Diversification Opportunities for Kien Giang and Development Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kien and Development is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kien Giang Construction and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment and Kien Giang 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 Kien Giang Construction are associated (or correlated) with Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Kien Giang i.e., Kien Giang and Development Investment go up and down completely randomly.
Pair Corralation between Kien Giang and Development Investment
Assuming the 90 days trading horizon Kien Giang Construction is expected to generate 0.81 times more return on investment than Development Investment. However, Kien Giang Construction is 1.24 times less risky than Development Investment. It trades about -0.04 of its potential returns per unit of risk. Development Investment Construction is currently generating about -0.04 per unit of risk. If you would invest 2,200,000 in Kien Giang Construction on January 23, 2025 and sell it today you would lose (620,000) from holding Kien Giang Construction or give up 28.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.86% |
| Values | Daily Returns |
Kien Giang Construction vs. Development Investment Constru
Performance |
| Timeline |
| Kien Giang Construction |
| Development Investment |
Kien Giang and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kien Giang and Development Investment
The main advantage of trading using opposite Kien Giang and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kien Giang position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Kien Giang vs. Song Hong Construction | Kien Giang vs. Ducgiang Chemicals Detergent | Kien Giang vs. Post and Telecommunications | Kien Giang vs. VTC Telecommunications JSC |
| Development Investment vs. AgriBank Securities JSC | Development Investment vs. Ducgiang Chemicals Detergent | Development Investment vs. Vietnam Rubber Group | Development Investment vs. IDJ FINANCIAL |
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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