Correlation Between President Automobile and Stock Exchange
Can any of the company-specific risk be diversified away by investing in both President Automobile and Stock Exchange 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 President Automobile and Stock Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Automobile Industries and Stock Exchange Of, you can compare the effects of market volatilities on President Automobile and Stock Exchange 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 President Automobile with a short position of Stock Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Automobile and Stock Exchange.
Diversification Opportunities for President Automobile and Stock Exchange
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between President and Stock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding President Automobile Industrie and Stock Exchange Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Exchange and President Automobile 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 President Automobile Industries are associated (or correlated) with Stock Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Exchange has no effect on the direction of President Automobile i.e., President Automobile and Stock Exchange go up and down completely randomly.
Pair Corralation between President Automobile and Stock Exchange
Assuming the 90 days trading horizon President Automobile Industries is expected to under-perform the Stock Exchange. In addition to that, President Automobile is 2.29 times more volatile than Stock Exchange Of. It trades about -0.17 of its total potential returns per unit of risk. Stock Exchange Of is currently generating about -0.09 per unit of volatility. If you would invest 145,116 in Stock Exchange Of on August 30, 2024 and sell it today you would lose (2,076) from holding Stock Exchange Of or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Automobile Industrie vs. Stock Exchange Of
Performance |
| Timeline |
President Automobile and Stock Exchange Volatility Contrast
Predicted Return Density |
| Returns |
President Automobile Industries
Pair trading matchups for President Automobile
Stock Exchange Of
Pair trading matchups for Stock Exchange
Pair Trading with President Automobile and Stock Exchange
The main advantage of trading using opposite President Automobile and Stock Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Automobile position performs unexpectedly, Stock Exchange 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 Stock Exchange will offset losses from the drop in Stock Exchange's long position.| President Automobile vs. Thai Stanley Electric | President Automobile vs. Somboon Advance Technology | President Automobile vs. PCS Machine Group | President Automobile vs. Thai Rung Union |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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