Correlation Between Global Electrical and DIC Holdings
Can any of the company-specific risk be diversified away by investing in both Global Electrical and DIC Holdings 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 Global Electrical and DIC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Electrical Technology and DIC Holdings Construction, you can compare the effects of market volatilities on Global Electrical and DIC Holdings 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 Global Electrical with a short position of DIC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Electrical and DIC Holdings.
Diversification Opportunities for Global Electrical and DIC Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and DIC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global Electrical Technology and DIC Holdings Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIC Holdings Construction and Global Electrical 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 Global Electrical Technology are associated (or correlated) with DIC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIC Holdings Construction has no effect on the direction of Global Electrical i.e., Global Electrical and DIC Holdings go up and down completely randomly.
Pair Corralation between Global Electrical and DIC Holdings
Assuming the 90 days trading horizon Global Electrical Technology is expected to generate 0.64 times more return on investment than DIC Holdings. However, Global Electrical Technology is 1.56 times less risky than DIC Holdings. It trades about 0.27 of its potential returns per unit of risk. DIC Holdings Construction is currently generating about -0.21 per unit of risk. If you would invest 2,570,000 in Global Electrical Technology on October 21, 2024 and sell it today you would earn a total of 60,000 from holding Global Electrical Technology or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.81% |
| Values | Daily Returns |
Global Electrical Technology vs. DIC Holdings Construction
Performance |
| Timeline |
| Global Electrical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DIC Holdings Construction |
Global Electrical and DIC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Electrical and DIC Holdings
The main advantage of trading using opposite Global Electrical and DIC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Electrical position performs unexpectedly, DIC Holdings 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 DIC Holdings will offset losses from the drop in DIC Holdings' long position.| Global Electrical vs. Tien Phong Plastic | Global Electrical vs. An Phat Holdings | Global Electrical vs. FPT Corp | Global Electrical vs. POST TELECOMMU |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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