Correlation Between MST Investment and LDG Investment
Can any of the company-specific risk be diversified away by investing in both MST Investment and LDG Investment 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 MST Investment and LDG Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MST Investment JSC and LDG Investment JSC, you can compare the effects of market volatilities on MST Investment and LDG Investment 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 MST Investment with a short position of LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MST Investment and LDG Investment.
Diversification Opportunities for MST Investment and LDG Investment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MST and LDG is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MST Investment JSC and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC and MST 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 MST Investment JSC are associated (or correlated) with LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of MST Investment i.e., MST Investment and LDG Investment go up and down completely randomly.
Pair Corralation between MST Investment and LDG Investment
Assuming the 90 days trading horizon MST Investment JSC is expected to generate 1.55 times more return on investment than LDG Investment. However, MST Investment is 1.55 times more volatile than LDG Investment JSC. It trades about 0.1 of its potential returns per unit of risk. LDG Investment JSC is currently generating about -0.09 per unit of risk. If you would invest 560,000 in MST Investment JSC on August 31, 2024 and sell it today you would earn a total of 30,000 from holding MST Investment JSC or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MST Investment JSC vs. LDG Investment JSC
Performance |
| Timeline |
| MST Investment JSC |
| LDG Investment JSC |
MST Investment and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MST Investment and LDG Investment
The main advantage of trading using opposite MST Investment and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MST Investment position performs unexpectedly, LDG Investment 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 LDG Investment will offset losses from the drop in LDG Investment's long position.| MST Investment vs. Vu Dang Investment | MST Investment vs. 577 Investment Corp | MST Investment vs. Tienlen Steel Corp | MST Investment vs. Hanoi Beer Alcohol |
| LDG Investment vs. Taseco Air Services | LDG Investment vs. Vietnam Rubber Group | LDG Investment vs. Thong Nhat Rubber | LDG Investment vs. Materials Petroleum JSC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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