Correlation Between Mechanics Construction and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Mechanics Construction and Thanh Dat 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 Thanh Dat 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 Thanh Dat Investment, you can compare the effects of market volatilities on Mechanics Construction and Thanh Dat 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 Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and Thanh Dat.
Diversification Opportunities for Mechanics Construction and Thanh Dat
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mechanics and Thanh is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat Investment 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 Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and Thanh Dat go up and down completely randomly.
Pair Corralation between Mechanics Construction and Thanh Dat
Assuming the 90 days trading horizon Mechanics Construction and is expected to generate 0.48 times more return on investment than Thanh Dat. However, Mechanics Construction and is 2.08 times less risky than Thanh Dat. It trades about 0.05 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about 0.01 per unit of risk. If you would invest 785,714 in Mechanics Construction and on October 29, 2024 and sell it today you would earn a total of 104,286 from holding Mechanics Construction and or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.89% |
| Values | Daily Returns |
Mechanics Construction and vs. Thanh Dat Investment
Performance |
| Timeline |
| Mechanics Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Thanh Dat Investment |
Mechanics Construction and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechanics Construction and Thanh Dat
The main advantage of trading using opposite Mechanics Construction and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Construction position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.| Mechanics Construction vs. Petrolimex Insurance Corp | Mechanics Construction vs. PVI Reinsurance Corp | Mechanics Construction vs. Nafoods Group JSC | Mechanics Construction vs. Viettel Construction JSC |
| Thanh Dat vs. Tri Viet Management | Thanh Dat vs. Industrial Urban Development | Thanh Dat vs. Post and Telecommunications | Thanh Dat vs. FPT Digital Retail |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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