Correlation Between Cotec Construction and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Cotec Construction and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Ducgiang Chemicals.
Diversification Opportunities for Cotec Construction and Ducgiang Chemicals
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cotec and Ducgiang is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Cotec Construction i.e., Cotec Construction and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Cotec Construction and Ducgiang Chemicals
Assuming the 90 days trading horizon Cotec Construction JSC is expected to under-perform the Ducgiang Chemicals. In addition to that, Cotec Construction is 1.01 times more volatile than Ducgiang Chemicals Detergent. It trades about -0.08 of its total potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about -0.04 per unit of volatility. If you would invest 11,140,000 in Ducgiang Chemicals Detergent on September 2, 2024 and sell it today you would lose (190,000) from holding Ducgiang Chemicals Detergent or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cotec Construction JSC vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Cotec Construction JSC |
| Ducgiang Chemicals |
Cotec Construction and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and Ducgiang Chemicals
The main advantage of trading using opposite Cotec Construction and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Cotec Construction vs. FIT INVEST JSC | Cotec Construction vs. Damsan JSC | Cotec Construction vs. An Phat Plastic | Cotec Construction vs. Alphanam ME |
| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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