Correlation Between Construction JSC and TDT Investment
Can any of the company-specific risk be diversified away by investing in both Construction JSC and TDT 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 Construction JSC and TDT Investment 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 TDT Investment and, you can compare the effects of market volatilities on Construction JSC and TDT 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 Construction JSC with a short position of TDT Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction JSC and TDT Investment.
Diversification Opportunities for Construction JSC and TDT Investment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Construction and TDT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Construction JSC No5 and TDT Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDT Investment 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 TDT Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDT Investment has no effect on the direction of Construction JSC i.e., Construction JSC and TDT Investment go up and down completely randomly.
Pair Corralation between Construction JSC and TDT Investment
Assuming the 90 days trading horizon Construction JSC No5 is expected to under-perform the TDT Investment. In addition to that, Construction JSC is 5.78 times more volatile than TDT Investment and. It trades about 0.0 of its total potential returns per unit of risk. TDT Investment and is currently generating about 0.12 per unit of volatility. If you would invest 680,000 in TDT Investment and on October 26, 2024 and sell it today you would earn a total of 40,000 from holding TDT Investment and or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 55.56% |
| Values | Daily Returns |
Construction JSC No5 vs. TDT Investment and
Performance |
| Timeline |
| Construction JSC No5 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TDT Investment |
Construction JSC and TDT Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction JSC and TDT Investment
The main advantage of trading using opposite Construction JSC and TDT Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction JSC position performs unexpectedly, TDT 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 TDT Investment will offset losses from the drop in TDT Investment's long position.| Construction JSC vs. TDT Investment and | Construction JSC vs. Dinhvu Port Investment | Construction JSC vs. Saigon Telecommunication Technologies | Construction JSC vs. VTC Telecommunications JSC |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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