Correlation Between International Gas and Industrial Urban
Can any of the company-specific risk be diversified away by investing in both International Gas and Industrial Urban 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 International Gas and Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Gas Product and Industrial Urban Development, you can compare the effects of market volatilities on International Gas and Industrial Urban 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 International Gas with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Gas and Industrial Urban.
Diversification Opportunities for International Gas and Industrial Urban
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between International and Industrial is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding International Gas Product and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and International Gas 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 International Gas Product are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of International Gas i.e., International Gas and Industrial Urban go up and down completely randomly.
Pair Corralation between International Gas and Industrial Urban
Assuming the 90 days trading horizon International Gas Product is expected to under-perform the Industrial Urban. In addition to that, International Gas is 1.35 times more volatile than Industrial Urban Development. It trades about -0.04 of its total potential returns per unit of risk. Industrial Urban Development is currently generating about 0.06 per unit of volatility. If you would invest 1,943,107 in Industrial Urban Development on September 12, 2024 and sell it today you would earn a total of 1,251,893 from holding Industrial Urban Development or generate 64.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
International Gas Product vs. Industrial Urban Development
Performance |
| Timeline |
| International Gas Product |
| Industrial Urban Dev |
International Gas and Industrial Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Gas and Industrial Urban
The main advantage of trading using opposite International Gas and Industrial Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Gas position performs unexpectedly, Industrial Urban 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 Industrial Urban will offset losses from the drop in Industrial Urban's long position.| International Gas vs. Post and Telecommunications | International Gas vs. Vietnam Petroleum Transport | International Gas vs. PostTelecommunication Equipment | International Gas vs. FPT Digital Retail |
| Industrial Urban vs. FIT INVEST JSC | Industrial Urban vs. Damsan JSC | Industrial Urban vs. An Phat Plastic | Industrial Urban vs. Alphanam ME |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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