Correlation Between Mechanics Construction and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Mechanics Construction and Asia Commercial 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 Mechanics Construction and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Construction and and Asia Commercial Bank, you can compare the effects of market volatilities on Mechanics Construction and Asia Commercial 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 Mechanics Construction with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and Asia Commercial.
Diversification Opportunities for Mechanics Construction and Asia Commercial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mechanics and Asia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Mechanics 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 Mechanics Construction and are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and Asia Commercial go up and down completely randomly.
Pair Corralation between Mechanics Construction and Asia Commercial
Assuming the 90 days trading horizon Mechanics Construction and is expected to generate 0.65 times more return on investment than Asia Commercial. However, Mechanics Construction and is 1.55 times less risky than Asia Commercial. It trades about 0.08 of its potential returns per unit of risk. Asia Commercial Bank is currently generating about -0.1 per unit of risk. If you would invest 850,000 in Mechanics Construction and on September 15, 2024 and sell it today you would earn a total of 10,000 from holding Mechanics Construction and or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Mechanics Construction and vs. Asia Commercial Bank
Performance |
| Timeline |
| Mechanics Construction |
| Asia Commercial Bank |
Mechanics Construction and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechanics Construction and Asia Commercial
The main advantage of trading using opposite Mechanics Construction and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Construction position performs unexpectedly, Asia Commercial 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 Asia Commercial will offset losses from the drop in Asia Commercial's long position.| Mechanics Construction vs. FIT INVEST JSC | Mechanics Construction vs. Damsan JSC | Mechanics Construction vs. An Phat Plastic | Mechanics Construction vs. Alphanam ME |
| Asia Commercial vs. Development Investment Construction | Asia Commercial vs. Agriculture Printing and | Asia Commercial vs. Mechanics Construction and | Asia Commercial vs. Pacific Petroleum Transportation |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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