Correlation Between Construction and International Gas
Can any of the company-specific risk be diversified away by investing in both Construction and International Gas 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 International Gas 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 International Gas Product, you can compare the effects of market volatilities on Construction and International Gas 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 International Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and International Gas.
Diversification Opportunities for Construction and International Gas
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Construction and International is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and International Gas Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Gas Product 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 International Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Gas Product has no effect on the direction of Construction i.e., Construction and International Gas go up and down completely randomly.
Pair Corralation between Construction and International Gas
Assuming the 90 days trading horizon Construction And Investment is expected to generate 0.52 times more return on investment than International Gas. However, Construction And Investment is 1.92 times less risky than International Gas. It trades about 0.03 of its potential returns per unit of risk. International Gas Product is currently generating about -0.06 per unit of risk. If you would invest 3,623,125 in Construction And Investment on September 14, 2024 and sell it today you would earn a total of 296,875 from holding Construction And Investment or generate 8.19% 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. International Gas Product
Performance |
| Timeline |
| Construction And Inv |
| International Gas Product |
Construction and International Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and International Gas
The main advantage of trading using opposite Construction and International Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, International Gas 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 International Gas will offset losses from the drop in International Gas' long position.| Construction vs. Da Nang Construction | Construction vs. TDG Global Investment | Construction vs. Din Capital Investment | Construction vs. Thanh Dat Investment |
| International Gas vs. Duong Hieu Trading | International Gas vs. PetroVietnam Transportation Corp | International Gas vs. Construction And Investment | International Gas vs. MST Investment JSC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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