Correlation Between SCG Construction and LDG Investment
Can any of the company-specific risk be diversified away by investing in both SCG Construction and LDG 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 SCG Construction and LDG Investment 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 LDG Investment JSC, you can compare the effects of market volatilities on SCG Construction and LDG 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 SCG Construction with a short position of LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and LDG Investment.
Diversification Opportunities for SCG Construction and LDG Investment
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCG and LDG is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of SCG Construction i.e., SCG Construction and LDG Investment go up and down completely randomly.
Pair Corralation between SCG Construction and LDG Investment
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.15 times more return on investment than LDG Investment. However, SCG Construction JSC is 6.74 times less risky than LDG Investment. It trades about 0.06 of its potential returns per unit of risk. LDG Investment JSC is currently generating about -0.04 per unit of risk. If you would invest 6,480,000 in SCG Construction JSC on August 28, 2024 and sell it today you would earn a total of 90,000 from holding SCG Construction JSC or generate 1.39% 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. LDG Investment JSC
Performance |
| Timeline |
| SCG Construction JSC |
| LDG Investment JSC |
SCG Construction and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and LDG Investment
The main advantage of trading using opposite SCG Construction and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, LDG 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 LDG Investment will offset losses from the drop in LDG Investment'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 |
| LDG Investment vs. FIT INVEST JSC | LDG Investment vs. Damsan JSC | LDG Investment vs. An Phat Plastic | LDG Investment vs. APG Securities Joint |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |