Correlation Between Construction JSC and Atesco Industrial
Can any of the company-specific risk be diversified away by investing in both Construction JSC and Atesco Industrial 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 Construction JSC and Atesco Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction JSC No5 and Atesco Industrial Cartering, you can compare the effects of market volatilities on Construction JSC and Atesco Industrial 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 Construction JSC with a short position of Atesco Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction JSC and Atesco Industrial.
Diversification Opportunities for Construction JSC and Atesco Industrial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Construction and Atesco is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Construction JSC No5 and Atesco Industrial Cartering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atesco Industrial and Construction JSC 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 Construction JSC No5 are associated (or correlated) with Atesco Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atesco Industrial has no effect on the direction of Construction JSC i.e., Construction JSC and Atesco Industrial go up and down completely randomly.
Pair Corralation between Construction JSC and Atesco Industrial
Assuming the 90 days trading horizon Construction JSC is expected to generate 5.04 times less return on investment than Atesco Industrial. But when comparing it to its historical volatility, Construction JSC No5 is 1.96 times less risky than Atesco Industrial. It trades about 0.03 of its potential returns per unit of risk. Atesco Industrial Cartering is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,110,000 in Atesco Industrial Cartering on September 12, 2024 and sell it today you would earn a total of 410,000 from holding Atesco Industrial Cartering or generate 36.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.22% |
| Values | Daily Returns |
Construction JSC No5 vs. Atesco Industrial Cartering
Performance |
| Timeline |
| Construction JSC No5 |
| Atesco Industrial |
Construction JSC and Atesco Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction JSC and Atesco Industrial
The main advantage of trading using opposite Construction JSC and Atesco Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction JSC position performs unexpectedly, Atesco Industrial 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 Atesco Industrial will offset losses from the drop in Atesco Industrial's long position.| Construction JSC vs. FIT INVEST JSC | Construction JSC vs. Damsan JSC | Construction JSC vs. An Phat Plastic | Construction JSC vs. Alphanam ME |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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