Correlation Between Kien Giang and Mechanics Construction
Can any of the company-specific risk be diversified away by investing in both Kien Giang 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 Kien Giang and Mechanics Construction 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 Mechanics Construction and, you can compare the effects of market volatilities on Kien Giang 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 Kien Giang with a short position of Mechanics Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kien Giang and Mechanics Construction.
Diversification Opportunities for Kien Giang and Mechanics Construction
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kien and Mechanics is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kien Giang Construction and Mechanics Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanics Construction 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 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 Kien Giang i.e., Kien Giang and Mechanics Construction go up and down completely randomly.
Pair Corralation between Kien Giang and Mechanics Construction
Assuming the 90 days trading horizon Kien Giang Construction is expected to under-perform the Mechanics Construction. But the stock apears to be less risky and, when comparing its historical volatility, Kien Giang Construction is 1.2 times less risky than Mechanics Construction. The stock trades about -0.01 of its potential returns per unit of risk. The Mechanics Construction and is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 687,500 in Mechanics Construction and on September 12, 2024 and sell it today you would earn a total of 162,500 from holding Mechanics Construction and or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.57% |
| Values | Daily Returns |
Kien Giang Construction vs. Mechanics Construction and
Performance |
| Timeline |
| Kien Giang Construction |
| Mechanics Construction |
Kien Giang and Mechanics Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kien Giang and Mechanics Construction
The main advantage of trading using opposite Kien Giang and Mechanics Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kien Giang 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.| Kien Giang vs. Saigon Telecommunication Technologies | Kien Giang vs. TDG Global Investment | Kien Giang vs. 577 Investment Corp | Kien Giang vs. Vu Dang Investment |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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