Correlation Between South Basic and Tng Investment
Can any of the company-specific risk be diversified away by investing in both South Basic and Tng 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 South Basic and Tng Investment 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 Tng Investment And, you can compare the effects of market volatilities on South Basic and Tng 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 South Basic with a short position of Tng Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and Tng Investment.
Diversification Opportunities for South Basic and Tng Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between South and Tng is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And 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 Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of South Basic i.e., South Basic and Tng Investment go up and down completely randomly.
Pair Corralation between South Basic and Tng Investment
Assuming the 90 days trading horizon South Basic Chemicals is expected to generate 1.78 times more return on investment than Tng Investment. However, South Basic is 1.78 times more volatile than Tng Investment And. It trades about 0.11 of its potential returns per unit of risk. Tng Investment And is currently generating about 0.02 per unit of risk. If you would invest 3,530,000 in South Basic Chemicals on August 29, 2024 and sell it today you would earn a total of 215,000 from holding South Basic Chemicals or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Basic Chemicals vs. Tng Investment And
Performance |
| Timeline |
| South Basic Chemicals |
| Tng Investment And |
South Basic and Tng Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and Tng Investment
The main advantage of trading using opposite South Basic and Tng Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, Tng 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 Tng Investment will offset losses from the drop in Tng Investment's long position.| South Basic vs. FIT INVEST JSC | South Basic vs. Damsan JSC | South Basic vs. An Phat Plastic | South Basic vs. APG Securities Joint |
| Tng Investment vs. FIT INVEST JSC | Tng Investment vs. Damsan JSC | Tng Investment vs. An Phat Plastic | Tng Investment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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