Correlation Between Innovative Technology and DIC Holdings
Can any of the company-specific risk be diversified away by investing in both Innovative Technology 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 Innovative Technology and DIC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Technology Development and DIC Holdings Construction, you can compare the effects of market volatilities on Innovative Technology 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 Innovative Technology with a short position of DIC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and DIC Holdings.
Diversification Opportunities for Innovative Technology and DIC Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innovative and DIC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm 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 Innovative Technology 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 Innovative Technology Development 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 Innovative Technology i.e., Innovative Technology and DIC Holdings go up and down completely randomly.
Pair Corralation between Innovative Technology and DIC Holdings
Assuming the 90 days trading horizon Innovative Technology Development is expected to under-perform the DIC Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Innovative Technology Development is 1.45 times less risky than DIC Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The DIC Holdings Construction is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,205,000 in DIC Holdings Construction on September 5, 2024 and sell it today you would earn a total of 330,000 from holding DIC Holdings Construction or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Innovative Technology Developm vs. DIC Holdings Construction
Performance |
| Timeline |
| Innovative Technology |
| DIC Holdings Construction |
Innovative Technology and DIC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Technology and DIC Holdings
The main advantage of trading using opposite Innovative Technology and DIC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Technology 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.| Innovative Technology vs. FIT INVEST JSC | Innovative Technology vs. Damsan JSC | Innovative Technology vs. An Phat Plastic | Innovative Technology vs. Alphanam ME |
| DIC Holdings vs. Elcom Technology Communications | DIC Holdings vs. Petrovietnam Technical Services | DIC Holdings vs. Pacific Petroleum Transportation | DIC Holdings vs. Innovative Technology Development |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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