Correlation Between CPC and PV2 Investment
Can any of the company-specific risk be diversified away by investing in both CPC and PV2 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 CPC and PV2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPC and PV2 Investment JSC, you can compare the effects of market volatilities on CPC and PV2 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 CPC with a short position of PV2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPC and PV2 Investment.
Diversification Opportunities for CPC and PV2 Investment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CPC and PV2 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CPC and PV2 Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PV2 Investment JSC and CPC 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 CPC are associated (or correlated) with PV2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PV2 Investment JSC has no effect on the direction of CPC i.e., CPC and PV2 Investment go up and down completely randomly.
Pair Corralation between CPC and PV2 Investment
Assuming the 90 days trading horizon CPC is expected to generate 0.48 times more return on investment than PV2 Investment. However, CPC is 2.07 times less risky than PV2 Investment. It trades about -0.01 of its potential returns per unit of risk. PV2 Investment JSC is currently generating about -0.02 per unit of risk. If you would invest 1,853,478 in CPC on September 5, 2024 and sell it today you would lose (43,478) from holding CPC or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
CPC vs. PV2 Investment JSC
Performance |
| Timeline |
| CPC |
| PV2 Investment JSC |
CPC and PV2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPC and PV2 Investment
The main advantage of trading using opposite CPC and PV2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPC position performs unexpectedly, PV2 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 PV2 Investment will offset losses from the drop in PV2 Investment's long position.| CPC vs. PV2 Investment JSC | CPC vs. Phuoc Hoa Rubber | CPC vs. PetroVietnam Drilling Well | CPC vs. Southern Rubber Industry |
| PV2 Investment vs. Mechanics Construction and | PV2 Investment vs. Ipa Investments Group | PV2 Investment vs. TDG Global Investment | PV2 Investment vs. Hung Hau Agricultural |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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