Correlation Between Investment and Cotec Construction
Can any of the company-specific risk be diversified away by investing in both Investment and Cotec Construction 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 Cotec Construction 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 Cotec Construction JSC, you can compare the effects of market volatilities on Investment and Cotec Construction 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 Cotec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Cotec Construction.
Diversification Opportunities for Investment and Cotec Construction
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investment and Cotec is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Investment And Construction and Cotec Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cotec Construction JSC 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 Cotec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cotec Construction JSC has no effect on the direction of Investment i.e., Investment and Cotec Construction go up and down completely randomly.
Pair Corralation between Investment and Cotec Construction
Assuming the 90 days trading horizon Investment And Construction is expected to generate 2.2 times more return on investment than Cotec Construction. However, Investment is 2.2 times more volatile than Cotec Construction JSC. It trades about 0.06 of its potential returns per unit of risk. Cotec Construction JSC is currently generating about 0.1 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 | Very Weak |
| Accuracy | 95.33% |
| Values | Daily Returns |
Investment And Construction vs. Cotec Construction JSC
Performance |
| Timeline |
| Investment And Const |
| Cotec Construction JSC |
Investment and Cotec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Cotec Construction
The main advantage of trading using opposite Investment and Cotec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Cotec Construction 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 Cotec Construction will offset losses from the drop in Cotec Construction's long position.| Investment vs. Hai An Transport | Investment vs. PV2 Investment JSC | Investment vs. Hochiminh City Metal | Investment vs. Tien Giang Investment |
| Cotec Construction vs. Sea Air Freight | Cotec Construction vs. Kien Giang Construction | Cotec Construction vs. SCG Construction JSC | Cotec Construction vs. Binh Duong Construction |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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