Correlation Between Cotec Construction and 1369 Construction
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and 1369 Construction 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 Cotec Construction and 1369 Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cotec Construction JSC and 1369 Construction JSC, you can compare the effects of market volatilities on Cotec Construction and 1369 Construction 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 Cotec Construction with a short position of 1369 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and 1369 Construction.
Diversification Opportunities for Cotec Construction and 1369 Construction
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cotec and 1369 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and 1369 Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1369 Construction JSC and Cotec Construction 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 Cotec Construction JSC are associated (or correlated) with 1369 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1369 Construction JSC has no effect on the direction of Cotec Construction i.e., Cotec Construction and 1369 Construction go up and down completely randomly.
Pair Corralation between Cotec Construction and 1369 Construction
Assuming the 90 days trading horizon Cotec Construction JSC is expected to generate 0.91 times more return on investment than 1369 Construction. However, Cotec Construction JSC is 1.1 times less risky than 1369 Construction. It trades about 0.01 of its potential returns per unit of risk. 1369 Construction JSC is currently generating about 0.0 per unit of risk. If you would invest 6,570,000 in Cotec Construction JSC on September 2, 2024 and sell it today you would earn a total of 10,000 from holding Cotec Construction JSC or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Cotec Construction JSC vs. 1369 Construction JSC
Performance |
| Timeline |
| Cotec Construction JSC |
| 1369 Construction JSC |
Cotec Construction and 1369 Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and 1369 Construction
The main advantage of trading using opposite Cotec Construction and 1369 Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, 1369 Construction 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 1369 Construction will offset losses from the drop in 1369 Construction's long position.| Cotec Construction vs. FIT INVEST JSC | Cotec Construction vs. Damsan JSC | Cotec Construction vs. An Phat Plastic | Cotec Construction vs. Alphanam ME |
| 1369 Construction vs. FIT INVEST JSC | 1369 Construction vs. Damsan JSC | 1369 Construction vs. An Phat Plastic | 1369 Construction vs. Alphanam ME |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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