Correlation Between Construction and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both Construction and FIT INVEST 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 FIT INVEST 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 FIT INVEST JSC, you can compare the effects of market volatilities on Construction and FIT INVEST 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 FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and FIT INVEST.
Diversification Opportunities for Construction and FIT INVEST
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Construction and FIT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC 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 FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of Construction i.e., Construction and FIT INVEST go up and down completely randomly.
Pair Corralation between Construction and FIT INVEST
Assuming the 90 days trading horizon Construction And Investment is expected to generate 1.58 times more return on investment than FIT INVEST. However, Construction is 1.58 times more volatile than FIT INVEST JSC. It trades about 0.22 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about -0.1 per unit of risk. If you would invest 3,590,000 in Construction And Investment on August 29, 2024 and sell it today you would earn a total of 330,000 from holding Construction And Investment or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction And Investment vs. FIT INVEST JSC
Performance |
| Timeline |
| Construction And Inv |
| FIT INVEST JSC |
Construction and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and FIT INVEST
The main advantage of trading using opposite Construction and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| Construction vs. FIT INVEST JSC | Construction vs. Damsan JSC | Construction vs. An Phat Plastic | Construction vs. APG Securities Joint |
| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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