Correlation Between South Basic and Atesco Industrial
Can any of the company-specific risk be diversified away by investing in both South Basic and Atesco Industrial 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 South Basic and Atesco Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and Atesco Industrial Cartering, you can compare the effects of market volatilities on South Basic and Atesco Industrial 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 South Basic with a short position of Atesco Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and Atesco Industrial.
Diversification Opportunities for South Basic and Atesco Industrial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and Atesco is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and Atesco Industrial Cartering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atesco Industrial and South Basic 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 South Basic Chemicals are associated (or correlated) with Atesco Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atesco Industrial has no effect on the direction of South Basic i.e., South Basic and Atesco Industrial go up and down completely randomly.
Pair Corralation between South Basic and Atesco Industrial
Assuming the 90 days trading horizon South Basic Chemicals is expected to under-perform the Atesco Industrial. But the stock apears to be less risky and, when comparing its historical volatility, South Basic Chemicals is 1.3 times less risky than Atesco Industrial. The stock trades about -0.05 of its potential returns per unit of risk. The Atesco Industrial Cartering is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,580,000 in Atesco Industrial Cartering on August 25, 2024 and sell it today you would lose (300,000) from holding Atesco Industrial Cartering or give up 18.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 37.32% |
| Values | Daily Returns |
South Basic Chemicals vs. Atesco Industrial Cartering
Performance |
| Timeline |
| South Basic Chemicals |
| Atesco Industrial |
South Basic and Atesco Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and Atesco Industrial
The main advantage of trading using opposite South Basic and Atesco Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, Atesco Industrial 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 Atesco Industrial will offset losses from the drop in Atesco Industrial's long position.| South Basic vs. Sao Vang Rubber | South Basic vs. Pha Lai Thermal | South Basic vs. Century Synthetic Fiber | South Basic vs. BaoMinh Insurance Corp |
| Atesco Industrial vs. Idico JSC | Atesco Industrial vs. Hochiminh City Metal | Atesco Industrial vs. Danang Education Investment | Atesco Industrial vs. South Basic Chemicals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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