Correlation Between Dimet Public and Eastern Polymer
Can any of the company-specific risk be diversified away by investing in both Dimet Public and Eastern Polymer 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 Dimet Public and Eastern Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimet Public and Eastern Polymer Group, you can compare the effects of market volatilities on Dimet Public and Eastern Polymer 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 Dimet Public with a short position of Eastern Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimet Public and Eastern Polymer.
Diversification Opportunities for Dimet Public and Eastern Polymer
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dimet and Eastern is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dimet Public and Eastern Polymer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Polymer Group and Dimet Public 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 Dimet Public are associated (or correlated) with Eastern Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Polymer Group has no effect on the direction of Dimet Public i.e., Dimet Public and Eastern Polymer go up and down completely randomly.
Pair Corralation between Dimet Public and Eastern Polymer
Assuming the 90 days trading horizon Dimet Public is expected to generate 20.42 times more return on investment than Eastern Polymer. However, Dimet Public is 20.42 times more volatile than Eastern Polymer Group. It trades about 0.04 of its potential returns per unit of risk. Eastern Polymer Group is currently generating about -0.07 per unit of risk. If you would invest 48.00 in Dimet Public on November 2, 2024 and sell it today you would lose (24.00) from holding Dimet Public or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimet Public vs. Eastern Polymer Group
Performance |
| Timeline |
| Dimet Public |
| Eastern Polymer Group |
Dimet Public and Eastern Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimet Public and Eastern Polymer
The main advantage of trading using opposite Dimet Public and Eastern Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimet Public position performs unexpectedly, Eastern Polymer 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 Eastern Polymer will offset losses from the drop in Eastern Polymer's long position.| Dimet Public vs. ARIP Public | Dimet Public vs. G Capital Public | Dimet Public vs. Hydrotek Public | Dimet Public vs. East Coast Furnitech |
| Eastern Polymer vs. AP Public | Eastern Polymer vs. CK Power Public | Eastern Polymer vs. Gunkul Engineering Public | Eastern Polymer vs. Indorama Ventures PCL |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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