Correlation Between Cotec Construction and Tay Ninh
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Tay Ninh 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 Tay Ninh 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 Tay Ninh Rubber, you can compare the effects of market volatilities on Cotec Construction and Tay Ninh 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 Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Tay Ninh.
Diversification Opportunities for Cotec Construction and Tay Ninh
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cotec and Tay is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Tay Ninh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh Rubber 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 Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Rubber has no effect on the direction of Cotec Construction i.e., Cotec Construction and Tay Ninh go up and down completely randomly.
Pair Corralation between Cotec Construction and Tay Ninh
Assuming the 90 days trading horizon Cotec Construction JSC is expected to under-perform the Tay Ninh. But the stock apears to be less risky and, when comparing its historical volatility, Cotec Construction JSC is 1.27 times less risky than Tay Ninh. The stock trades about -0.16 of its potential returns per unit of risk. The Tay Ninh Rubber is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,645,000 in Tay Ninh Rubber on September 13, 2024 and sell it today you would earn a total of 685,000 from holding Tay Ninh Rubber or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cotec Construction JSC vs. Tay Ninh Rubber
Performance |
| Timeline |
| Cotec Construction JSC |
| Tay Ninh Rubber |
Cotec Construction and Tay Ninh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and Tay Ninh
The main advantage of trading using opposite Cotec Construction and Tay Ninh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, Tay Ninh 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 Tay Ninh will offset losses from the drop in Tay Ninh'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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