Correlation Between Din Capital and SCG Construction
Can any of the company-specific risk be diversified away by investing in both Din Capital and SCG 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 Din Capital and SCG Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and SCG Construction JSC, you can compare the effects of market volatilities on Din Capital and SCG 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 Din Capital with a short position of SCG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and SCG Construction.
Diversification Opportunities for Din Capital and SCG Construction
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Din and SCG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and SCG Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG Construction JSC and Din Capital 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 Din Capital Investment are associated (or correlated) with SCG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG Construction JSC has no effect on the direction of Din Capital i.e., Din Capital and SCG Construction go up and down completely randomly.
Pair Corralation between Din Capital and SCG Construction
Assuming the 90 days trading horizon Din Capital Investment is expected to generate 5.1 times more return on investment than SCG Construction. However, Din Capital is 5.1 times more volatile than SCG Construction JSC. It trades about 0.06 of its potential returns per unit of risk. SCG Construction JSC is currently generating about 0.06 per unit of risk. If you would invest 930,000 in Din Capital Investment on August 28, 2024 and sell it today you would earn a total of 50,000 from holding Din Capital Investment or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.1% |
| Values | Daily Returns |
Din Capital Investment vs. SCG Construction JSC
Performance |
| Timeline |
| Din Capital Investment |
| SCG Construction JSC |
Din Capital and SCG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and SCG Construction
The main advantage of trading using opposite Din Capital and SCG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital position performs unexpectedly, SCG 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 SCG Construction will offset losses from the drop in SCG Construction's long position.| Din Capital vs. Hai An Transport | Din Capital vs. Dinhvu Port Investment | Din Capital vs. MST Investment JSC | Din Capital vs. Pacific Petroleum Transportation |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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