Correlation Between Investment and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both Investment and Southern Rubber 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 Investment and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment And Construction and Southern Rubber Industry, you can compare the effects of market volatilities on Investment and Southern Rubber 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 Investment with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Southern Rubber.
Diversification Opportunities for Investment and Southern Rubber
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Investment and Southern is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Investment And Construction and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and Investment 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 Investment And Construction are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of Investment i.e., Investment and Southern Rubber go up and down completely randomly.
Pair Corralation between Investment and Southern Rubber
Assuming the 90 days trading horizon Investment And Construction is expected to generate 2.62 times more return on investment than Southern Rubber. However, Investment is 2.62 times more volatile than Southern Rubber Industry. It trades about 0.06 of its potential returns per unit of risk. Southern Rubber Industry is currently generating about 0.01 per unit of risk. If you would invest 360,000 in Investment And Construction on November 5, 2024 and sell it today you would earn a total of 570,000 from holding Investment And Construction or generate 158.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.5% |
| Values | Daily Returns |
Investment And Construction vs. Southern Rubber Industry
Performance |
| Timeline |
| Investment And Const |
| Southern Rubber Industry |
Investment and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Southern Rubber
The main advantage of trading using opposite Investment and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Southern Rubber 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 Southern Rubber will offset losses from the drop in Southern Rubber's long position.| Investment vs. Hai An Transport | Investment vs. PV2 Investment JSC | Investment vs. Hochiminh City Metal | Investment vs. Tien Giang Investment |
| Southern Rubber vs. Danang Education Investment | Southern Rubber vs. Tien Phong Plastic | Southern Rubber vs. Asia Pacific Investment | Southern Rubber vs. Post and Telecommunications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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