Correlation Between Construction and POT
Can any of the company-specific risk be diversified away by investing in both Construction and POT 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 POT 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 PostTelecommunication Equipment, you can compare the effects of market volatilities on Construction and POT 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 POT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and POT.
Diversification Opportunities for Construction and POT
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Construction and POT is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and PostTelecommunication Equipmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostTelecommunication 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 POT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostTelecommunication has no effect on the direction of Construction i.e., Construction and POT go up and down completely randomly.
Pair Corralation between Construction and POT
Assuming the 90 days trading horizon Construction And Investment is expected to under-perform the POT. But the stock apears to be less risky and, when comparing its historical volatility, Construction And Investment is 2.44 times less risky than POT. The stock trades about -0.27 of its potential returns per unit of risk. The PostTelecommunication Equipment is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,500,000 in PostTelecommunication Equipment on November 2, 2024 and sell it today you would earn a total of 70,000 from holding PostTelecommunication Equipment or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.56% |
| Values | Daily Returns |
Construction And Investment vs. PostTelecommunication Equipmen
Performance |
| Timeline |
| Construction And Inv |
| PostTelecommunication |
Construction and POT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and POT
The main advantage of trading using opposite Construction and POT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, POT 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 POT will offset losses from the drop in POT's long position.| Construction vs. Vietnam Airlines JSC | Construction vs. PetroVietnam Transportation Corp | Construction vs. Nafoods Group JSC | Construction vs. Saigon Beer Alcohol |
| POT vs. Vien Dong Investment | POT vs. HUD1 Investment and | POT vs. HVC Investment and | POT vs. TDT Investment and |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |