Correlation Between PV2 Investment and Global Electrical
Can any of the company-specific risk be diversified away by investing in both PV2 Investment and Global Electrical 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 PV2 Investment and Global Electrical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PV2 Investment JSC and Global Electrical Technology, you can compare the effects of market volatilities on PV2 Investment and Global Electrical 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 PV2 Investment with a short position of Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PV2 Investment and Global Electrical.
Diversification Opportunities for PV2 Investment and Global Electrical
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PV2 and Global is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PV2 Investment JSC and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical and PV2 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 PV2 Investment JSC are associated (or correlated) with Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of PV2 Investment i.e., PV2 Investment and Global Electrical go up and down completely randomly.
Pair Corralation between PV2 Investment and Global Electrical
Assuming the 90 days trading horizon PV2 Investment is expected to generate 3.09 times less return on investment than Global Electrical. But when comparing it to its historical volatility, PV2 Investment JSC is 1.66 times less risky than Global Electrical. It trades about 0.03 of its potential returns per unit of risk. Global Electrical Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,992,607 in Global Electrical Technology on August 31, 2024 and sell it today you would earn a total of 717,393 from holding Global Electrical Technology or generate 36.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 62.29% |
| Values | Daily Returns |
PV2 Investment JSC vs. Global Electrical Technology
Performance |
| Timeline |
| PV2 Investment JSC |
| Global Electrical |
PV2 Investment and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PV2 Investment and Global Electrical
The main advantage of trading using opposite PV2 Investment and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PV2 Investment position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| PV2 Investment vs. FIT INVEST JSC | PV2 Investment vs. Damsan JSC | PV2 Investment vs. An Phat Plastic | PV2 Investment vs. Alphanam ME |
| Global Electrical vs. Song Hong Garment | Global Electrical vs. Alphanam ME | Global Electrical vs. Hochiminh City Metal | Global Electrical vs. Atesco Industrial Cartering |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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