Correlation Between Ducgiang Chemicals and South Basic
Can any of the company-specific risk be diversified away by investing in both Ducgiang Chemicals and South Basic 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 Ducgiang Chemicals and South Basic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ducgiang Chemicals Detergent and South Basic Chemicals, you can compare the effects of market volatilities on Ducgiang Chemicals and South Basic 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 Ducgiang Chemicals with a short position of South Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ducgiang Chemicals and South Basic.
Diversification Opportunities for Ducgiang Chemicals and South Basic
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ducgiang and South is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ducgiang Chemicals Detergent and South Basic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Basic Chemicals and Ducgiang Chemicals 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 Ducgiang Chemicals Detergent are associated (or correlated) with South Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Basic Chemicals has no effect on the direction of Ducgiang Chemicals i.e., Ducgiang Chemicals and South Basic go up and down completely randomly.
Pair Corralation between Ducgiang Chemicals and South Basic
Assuming the 90 days trading horizon Ducgiang Chemicals Detergent is expected to under-perform the South Basic. But the stock apears to be less risky and, when comparing its historical volatility, Ducgiang Chemicals Detergent is 1.48 times less risky than South Basic. The stock trades about -0.04 of its potential returns per unit of risk. The South Basic Chemicals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,630,000 in South Basic Chemicals on September 2, 2024 and sell it today you would earn a total of 90,000 from holding South Basic Chemicals or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ducgiang Chemicals Detergent vs. South Basic Chemicals
Performance |
| Timeline |
| Ducgiang Chemicals |
| South Basic Chemicals |
Ducgiang Chemicals and South Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ducgiang Chemicals and South Basic
The main advantage of trading using opposite Ducgiang Chemicals and South Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ducgiang Chemicals position performs unexpectedly, South Basic 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 South Basic will offset losses from the drop in South Basic's long position.| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals vs. Alphanam ME |
| South Basic vs. Vu Dang Investment | South Basic vs. Thanh Dat Investment | South Basic vs. DOMESCO Medical Import | South Basic vs. Tien Giang Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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