Correlation Between Southern Rubber and Investment
Can any of the company-specific risk be diversified away by investing in both Southern Rubber and 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 Southern Rubber and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Rubber Industry and Investment And Construction, you can compare the effects of market volatilities on Southern Rubber and 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 Southern Rubber with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Rubber and Investment.
Diversification Opportunities for Southern Rubber and Investment
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southern and Investment is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Southern Rubber Industry and Investment And Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment And Const and Southern Rubber 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 Southern Rubber Industry are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment And Const has no effect on the direction of Southern Rubber i.e., Southern Rubber and Investment go up and down completely randomly.
Pair Corralation between Southern Rubber and Investment
Assuming the 90 days trading horizon Southern Rubber Industry is expected to generate 0.92 times more return on investment than Investment. However, Southern Rubber Industry is 1.08 times less risky than Investment. It trades about 0.13 of its potential returns per unit of risk. Investment And Construction is currently generating about -0.13 per unit of risk. If you would invest 1,290,000 in Southern Rubber Industry on October 26, 2024 and sell it today you would earn a total of 175,000 from holding Southern Rubber Industry or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Rubber Industry vs. Investment And Construction
Performance |
| Timeline |
| Southern Rubber Industry |
| Investment And Const |
Southern Rubber and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Rubber and Investment
The main advantage of trading using opposite Southern Rubber and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Rubber position performs unexpectedly, 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 Investment will offset losses from the drop in Investment's long position.| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber vs. APG Securities Joint |
| Investment vs. Saigon Viendong Technology | Investment vs. Elcom Technology Communications | Investment vs. Ha Noi Education | Investment vs. Investment and Industrial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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