Correlation Between Cotec Construction and Agriculture Printing
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Agriculture Printing 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 Agriculture Printing 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 Agriculture Printing and, you can compare the effects of market volatilities on Cotec Construction and Agriculture Printing 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 Agriculture Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Agriculture Printing.
Diversification Opportunities for Cotec Construction and Agriculture Printing
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cotec and Agriculture is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and 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 Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Cotec Construction i.e., Cotec Construction and Agriculture Printing go up and down completely randomly.
Pair Corralation between Cotec Construction and Agriculture Printing
Assuming the 90 days trading horizon Cotec Construction JSC is expected to under-perform the Agriculture Printing. In addition to that, Cotec Construction is 1.3 times more volatile than Agriculture Printing and. It trades about -0.08 of its total potential returns per unit of risk. Agriculture Printing and is currently generating about 0.09 per unit of volatility. If you would invest 5,360,000 in Agriculture Printing and on September 2, 2024 and sell it today you would earn a total of 120,000 from holding Agriculture Printing and or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cotec Construction JSC vs. Agriculture Printing and
Performance |
| Timeline |
| Cotec Construction JSC |
| Agriculture Printing and |
Cotec Construction and Agriculture Printing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and Agriculture Printing
The main advantage of trading using opposite Cotec Construction and Agriculture Printing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, Agriculture Printing 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 Agriculture Printing will offset losses from the drop in Agriculture Printing'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 |
| Agriculture Printing vs. FIT INVEST JSC | Agriculture Printing vs. Damsan JSC | Agriculture Printing vs. An Phat Plastic | Agriculture Printing 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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