Correlation Between IDJ FINANCIAL and Kien Giang
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL 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 IDJ FINANCIAL and Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and Kien Giang Construction, you can compare the effects of market volatilities on IDJ FINANCIAL 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 IDJ FINANCIAL with a short position of Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and Kien Giang.
Diversification Opportunities for IDJ FINANCIAL and Kien Giang
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDJ and Kien is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL 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 IDJ FINANCIAL 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 IDJ FINANCIAL 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 IDJ FINANCIAL i.e., IDJ FINANCIAL and Kien Giang go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and Kien Giang
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to generate 1.32 times more return on investment than Kien Giang. However, IDJ FINANCIAL is 1.32 times more volatile than Kien Giang Construction. It trades about 0.05 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 620,000 in IDJ FINANCIAL on September 13, 2024 and sell it today you would earn a total of 10,000 from holding IDJ FINANCIAL or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDJ FINANCIAL vs. Kien Giang Construction
Performance |
| Timeline |
| IDJ FINANCIAL |
| Kien Giang Construction |
IDJ FINANCIAL and Kien Giang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and Kien Giang
The main advantage of trading using opposite IDJ FINANCIAL and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL 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.| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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