Correlation Between Southern Rubber and Post
Can any of the company-specific risk be diversified away by investing in both Southern Rubber and Post 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 Post 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 Post and Telecommunications, you can compare the effects of market volatilities on Southern Rubber and Post 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 Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Rubber and Post.
Diversification Opportunities for Southern Rubber and Post
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and Post is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Southern Rubber Industry and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni 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 Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Southern Rubber i.e., Southern Rubber and Post go up and down completely randomly.
Pair Corralation between Southern Rubber and Post
Assuming the 90 days trading horizon Southern Rubber Industry is expected to generate 0.93 times more return on investment than Post. However, Southern Rubber Industry is 1.08 times less risky than Post. It trades about 0.07 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.04 per unit of risk. If you would invest 1,150,000 in Southern Rubber Industry on August 24, 2024 and sell it today you would earn a total of 35,000 from holding Southern Rubber Industry or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Southern Rubber Industry vs. Post and Telecommunications
Performance |
| Timeline |
| Southern Rubber Industry |
| Post and Telecommuni |
Southern Rubber and Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Rubber and Post
The main advantage of trading using opposite Southern Rubber and Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Rubber position performs unexpectedly, Post 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 Post will offset losses from the drop in Post'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 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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