Correlation Between Construction and Song Hong
Can any of the company-specific risk be diversified away by investing in both Construction and Song Hong 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 Song Hong 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 Song Hong Garment, you can compare the effects of market volatilities on Construction and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and Song Hong.
Diversification Opportunities for Construction and Song Hong
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Construction and Song is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and Song Hong Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Garment 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Garment has no effect on the direction of Construction i.e., Construction and Song Hong go up and down completely randomly.
Pair Corralation between Construction and Song Hong
Assuming the 90 days trading horizon Construction And Investment is expected to generate 0.73 times more return on investment than Song Hong. However, Construction And Investment is 1.36 times less risky than Song Hong. It trades about 0.23 of its potential returns per unit of risk. Song Hong Garment is currently generating about -0.04 per unit of risk. If you would invest 3,710,000 in Construction And Investment on September 12, 2024 and sell it today you would earn a total of 280,000 from holding Construction And Investment or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction And Investment vs. Song Hong Garment
Performance |
| Timeline |
| Construction And Inv |
| Song Hong Garment |
Construction and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and Song Hong
The main advantage of trading using opposite Construction and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Construction vs. FIT INVEST JSC | Construction vs. Damsan JSC | Construction vs. An Phat Plastic | Construction vs. Alphanam ME |
| Song Hong vs. HUD1 Investment and | Song Hong vs. Din Capital Investment | Song Hong vs. Everland Investment JSC | Song Hong vs. Ha Long 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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