Correlation Between Post and Development Investment
Can any of the company-specific risk be diversified away by investing in both Post and Development 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 Post and Development Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Development Investment Construction, you can compare the effects of market volatilities on Post and Development 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 Post with a short position of Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Development Investment.
Diversification Opportunities for Post and Development Investment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Post and Development is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment and Post 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 Post and Telecommunications are associated (or correlated) with Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Post i.e., Post and Development Investment go up and down completely randomly.
Pair Corralation between Post and Development Investment
Assuming the 90 days trading horizon Post and Telecommunications is expected to under-perform the Development Investment. But the stock apears to be less risky and, when comparing its historical volatility, Post and Telecommunications is 1.39 times less risky than Development Investment. The stock trades about -0.06 of its potential returns per unit of risk. The Development Investment Construction is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,660,000 in Development Investment Construction on August 31, 2024 and sell it today you would lose (110,000) from holding Development Investment Construction or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.58% |
| Values | Daily Returns |
Post and Telecommunications vs. Development Investment Constru
Performance |
| Timeline |
| Post and Telecommuni |
| Development Investment |
Post and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and Development Investment
The main advantage of trading using opposite Post and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Development 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 Development Investment will offset losses from the drop in Development Investment's long position.| Post vs. MST Investment JSC | Post vs. Din Capital Investment | Post vs. Petrolimex Information Technology | Post vs. Vina2 Investment and |
| Development Investment vs. Telecoms Informatics JSC | Development Investment vs. Thanh Dat Investment | Development Investment vs. Vien Dong Investment | Development Investment vs. Everland Investment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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