Correlation Between SCG Construction and CEO Group
Can any of the company-specific risk be diversified away by investing in both SCG Construction and CEO Group 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 SCG Construction and CEO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Construction JSC and CEO Group JSC, you can compare the effects of market volatilities on SCG Construction and CEO Group 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 SCG Construction with a short position of CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and CEO Group.
Diversification Opportunities for SCG Construction and CEO Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCG and CEO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and SCG Construction 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 SCG Construction JSC are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of SCG Construction i.e., SCG Construction and CEO Group go up and down completely randomly.
Pair Corralation between SCG Construction and CEO Group
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.21 times more return on investment than CEO Group. However, SCG Construction JSC is 4.79 times less risky than CEO Group. It trades about 0.04 of its potential returns per unit of risk. CEO Group JSC is currently generating about -0.49 per unit of risk. If you would invest 6,480,000 in SCG Construction JSC on October 17, 2024 and sell it today you would earn a total of 20,000 from holding SCG Construction JSC or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCG Construction JSC vs. CEO Group JSC
Performance |
| Timeline |
| SCG Construction JSC |
| CEO Group JSC |
SCG Construction and CEO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and CEO Group
The main advantage of trading using opposite SCG Construction and CEO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, CEO Group 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 CEO Group will offset losses from the drop in CEO Group's long position.| SCG Construction vs. FIT INVEST JSC | SCG Construction vs. Damsan JSC | SCG Construction vs. An Phat Plastic | SCG Construction vs. APG Securities Joint |
| CEO Group vs. Binhthuan Agriculture Services | CEO Group vs. Saigon Machinery Spare | CEO Group vs. SCG Construction JSC | CEO Group vs. Transimex Transportation 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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