Correlation Between Kien Giang and Global Electrical
Can any of the company-specific risk be diversified away by investing in both Kien Giang and Global Electrical 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 Global Electrical 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 Global Electrical Technology, you can compare the effects of market volatilities on Kien Giang and Global Electrical 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 Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kien Giang and Global Electrical.
Diversification Opportunities for Kien Giang and Global Electrical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kien and Global is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kien Giang Construction and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical 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 Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of Kien Giang i.e., Kien Giang and Global Electrical go up and down completely randomly.
Pair Corralation between Kien Giang and Global Electrical
Assuming the 90 days trading horizon Kien Giang is expected to generate 4.12 times less return on investment than Global Electrical. But when comparing it to its historical volatility, Kien Giang Construction is 2.82 times less risky than Global Electrical. It trades about 0.06 of its potential returns per unit of risk. Global Electrical Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,839,683 in Global Electrical Technology on September 3, 2024 and sell it today you would earn a total of 810,317 from holding Global Electrical Technology or generate 44.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.85% |
| Values | Daily Returns |
Kien Giang Construction vs. Global Electrical Technology
Performance |
| Timeline |
| Kien Giang Construction |
| Global Electrical |
Kien Giang and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kien Giang and Global Electrical
The main advantage of trading using opposite Kien Giang and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kien Giang position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| Kien Giang vs. FIT INVEST JSC | Kien Giang vs. Damsan JSC | Kien Giang vs. An Phat Plastic | Kien Giang vs. Alphanam ME |
| Global Electrical vs. IDJ FINANCIAL | Global Electrical vs. PVI Reinsurance Corp | Global Electrical vs. Fecon Mining JSC | Global Electrical vs. Industrial Urban Development |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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