Correlation Between Com7 PCL and Selic Corp
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Selic Corp 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 Com7 PCL and Selic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Selic Corp Public, you can compare the effects of market volatilities on Com7 PCL and Selic Corp 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 Com7 PCL with a short position of Selic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Selic Corp.
Diversification Opportunities for Com7 PCL and Selic Corp
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Com7 and Selic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Selic Corp Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selic Corp Public and Com7 PCL 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 Com7 PCL are associated (or correlated) with Selic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selic Corp Public has no effect on the direction of Com7 PCL i.e., Com7 PCL and Selic Corp go up and down completely randomly.
Pair Corralation between Com7 PCL and Selic Corp
Assuming the 90 days trading horizon Com7 PCL is expected to generate 573.27 times less return on investment than Selic Corp. But when comparing it to its historical volatility, Com7 PCL is 23.41 times less risky than Selic Corp. It trades about 0.0 of its potential returns per unit of risk. Selic Corp Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 235.00 in Selic Corp Public on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Selic Corp Public or generate 37.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. Selic Corp Public
Performance |
| Timeline |
| Com7 PCL |
| Selic Corp Public |
Com7 PCL and Selic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Selic Corp
The main advantage of trading using opposite Com7 PCL and Selic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Selic Corp 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 Selic Corp will offset losses from the drop in Selic Corp's long position.| Com7 PCL vs. Hwa Fong Rubber | Com7 PCL vs. AAPICO Hitech Public | Com7 PCL vs. Haad Thip Public | Com7 PCL vs. Italian Thai Development Public |
| Selic Corp vs. Sri Trang Agro Industry | Selic Corp vs. Jay Mart Public | Selic Corp vs. Com7 PCL | Selic Corp vs. Energy Absolute Public |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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