Correlation Between Post and MHC JSC
Can any of the company-specific risk be diversified away by investing in both Post and MHC JSC 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 MHC JSC 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 MHC JSC, you can compare the effects of market volatilities on Post and MHC JSC 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 MHC JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and MHC JSC.
Diversification Opportunities for Post and MHC JSC
Poor diversification
The 3 months correlation between Post and MHC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and MHC JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHC JSC 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 MHC JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHC JSC has no effect on the direction of Post i.e., Post and MHC JSC go up and down completely randomly.
Pair Corralation between Post and MHC JSC
Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 0.95 times more return on investment than MHC JSC. However, Post and Telecommunications is 1.05 times less risky than MHC JSC. It trades about -0.06 of its potential returns per unit of risk. MHC JSC is currently generating about -0.07 per unit of risk. If you would invest 518,000 in Post and Telecommunications on August 31, 2024 and sell it today you would lose (51,000) from holding Post and Telecommunications or give up 9.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post and Telecommunications vs. MHC JSC
Performance |
| Timeline |
| Post and Telecommuni |
| MHC JSC |
Post and MHC JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and MHC JSC
The main advantage of trading using opposite Post and MHC JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, MHC JSC 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 MHC JSC will offset losses from the drop in MHC JSC's long position.| Post vs. MST Investment JSC | Post vs. Din Capital Investment | Post vs. Petrolimex Information Technology | Post vs. Vina2 Investment and |
| MHC JSC vs. Construction And Investment | MHC JSC vs. Taseco Air Services | MHC JSC vs. Petrolimex Information Technology | MHC JSC vs. PetroVietnam Transportation Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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