Correlation Between Construction and Sao Ta
Can any of the company-specific risk be diversified away by investing in both Construction and Sao Ta 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 Sao Ta 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 Sao Ta Foods, you can compare the effects of market volatilities on Construction and Sao Ta 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 Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and Sao Ta.
Diversification Opportunities for Construction and Sao Ta
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Construction and Sao is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods 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 Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of Construction i.e., Construction and Sao Ta go up and down completely randomly.
Pair Corralation between Construction and Sao Ta
Assuming the 90 days trading horizon Construction And Investment is expected to generate 1.58 times more return on investment than Sao Ta. However, Construction is 1.58 times more volatile than Sao Ta Foods. It trades about 0.1 of its potential returns per unit of risk. Sao Ta Foods is currently generating about -0.07 per unit of risk. If you would invest 3,480,000 in Construction And Investment on October 17, 2024 and sell it today you would earn a total of 340,000 from holding Construction And Investment or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction And Investment vs. Sao Ta Foods
Performance |
| Timeline |
| Construction And Inv |
| Sao Ta Foods |
Construction and Sao Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and Sao Ta
The main advantage of trading using opposite Construction and Sao Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, Sao Ta 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 Sao Ta will offset losses from the drop in Sao Ta's long position.| Construction vs. TDT Investment and | Construction vs. POST TELECOMMU | Construction vs. Binh Duong Trade | Construction vs. Vincom Retail JSC |
| Sao Ta vs. Construction And Investment | Sao Ta vs. Pha Lai Thermal | Sao Ta vs. Development Investment Construction | Sao Ta vs. Ba Ria Thermal |
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 CEOs Directory module to screen CEOs from public companies around the world.
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