Correlation Between Construction and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Construction and Bao Ngoc 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 Construction and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction And Investment and Bao Ngoc Investment, you can compare the effects of market volatilities on Construction and Bao Ngoc 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 Construction with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and Bao Ngoc.
Diversification Opportunities for Construction and Bao Ngoc
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Construction and Bao is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and Construction 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 Construction And Investment are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Construction i.e., Construction and Bao Ngoc go up and down completely randomly.
Pair Corralation between Construction and Bao Ngoc
Assuming the 90 days trading horizon Construction is expected to generate 1.48 times less return on investment than Bao Ngoc. But when comparing it to its historical volatility, Construction And Investment is 1.78 times less risky than Bao Ngoc. It trades about 0.05 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 944,000 in Bao Ngoc Investment on September 2, 2024 and sell it today you would earn a total of 16,000 from holding Bao Ngoc Investment or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Construction And Investment vs. Bao Ngoc Investment
Performance |
| Timeline |
| Construction And Inv |
| Bao Ngoc Investment |
Construction and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and Bao Ngoc
The main advantage of trading using opposite Construction and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Construction vs. Mechanics Construction and | Construction vs. Saigon Viendong Technology | Construction vs. Techcom Vietnam REIT | Construction vs. Hung Hau Agricultural |
| Bao Ngoc vs. Innovative Technology Development | Bao Ngoc vs. Saigon Viendong Technology | Bao Ngoc vs. Petrovietnam Drilling Mud | Bao Ngoc vs. Construction And Investment |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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