Correlation Between DOMESCO Medical and Kien Giang
Can any of the company-specific risk be diversified away by investing in both DOMESCO Medical and Kien Giang 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 DOMESCO Medical and Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOMESCO Medical Import and Kien Giang Construction, you can compare the effects of market volatilities on DOMESCO Medical and Kien Giang 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 DOMESCO Medical with a short position of Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMESCO Medical and Kien Giang.
Diversification Opportunities for DOMESCO Medical and Kien Giang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DOMESCO and Kien is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding DOMESCO Medical Import and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction and DOMESCO Medical 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 DOMESCO Medical Import are associated (or correlated) with Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of DOMESCO Medical i.e., DOMESCO Medical and Kien Giang go up and down completely randomly.
Pair Corralation between DOMESCO Medical and Kien Giang
Assuming the 90 days trading horizon DOMESCO Medical Import is expected to generate 1.08 times more return on investment than Kien Giang. However, DOMESCO Medical is 1.08 times more volatile than Kien Giang Construction. It trades about -0.07 of its potential returns per unit of risk. Kien Giang Construction is currently generating about -0.13 per unit of risk. If you would invest 6,680,000 in DOMESCO Medical Import on September 13, 2024 and sell it today you would lose (150,000) from holding DOMESCO Medical Import or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
DOMESCO Medical Import vs. Kien Giang Construction
Performance |
| Timeline |
| DOMESCO Medical Import |
| Kien Giang Construction |
DOMESCO Medical and Kien Giang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOMESCO Medical and Kien Giang
The main advantage of trading using opposite DOMESCO Medical and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMESCO Medical position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.| DOMESCO Medical vs. Bich Chi Food | DOMESCO Medical vs. Vu Dang Investment | DOMESCO Medical vs. Sao Ta Foods | DOMESCO Medical vs. HUD1 Investment and |
| Kien Giang vs. SCG Construction JSC | Kien Giang vs. Binh Duong Construction | Kien Giang vs. POST TELECOMMU | Kien Giang vs. Elcom Technology Communications |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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