Correlation Between SPCG Public and Ditto Public
Can any of the company-specific risk be diversified away by investing in both SPCG Public and Ditto Public 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 SPCG Public and Ditto Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPCG Public and Ditto Public, you can compare the effects of market volatilities on SPCG Public and Ditto Public 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 SPCG Public with a short position of Ditto Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPCG Public and Ditto Public.
Diversification Opportunities for SPCG Public and Ditto Public
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPCG and Ditto is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SPCG Public and Ditto Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ditto Public and SPCG Public 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 SPCG Public are associated (or correlated) with Ditto Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ditto Public has no effect on the direction of SPCG Public i.e., SPCG Public and Ditto Public go up and down completely randomly.
Pair Corralation between SPCG Public and Ditto Public
Assuming the 90 days trading horizon SPCG Public is expected to generate 0.36 times more return on investment than Ditto Public. However, SPCG Public is 2.78 times less risky than Ditto Public. It trades about -0.05 of its potential returns per unit of risk. Ditto Public is currently generating about -0.05 per unit of risk. If you would invest 1,202 in SPCG Public on September 4, 2024 and sell it today you would lose (352.00) from holding SPCG Public or give up 29.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
SPCG Public vs. Ditto Public
Performance |
| Timeline |
| SPCG Public |
| Ditto Public |
SPCG Public and Ditto Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPCG Public and Ditto Public
The main advantage of trading using opposite SPCG Public and Ditto Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPCG Public position performs unexpectedly, Ditto Public 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 Ditto Public will offset losses from the drop in Ditto Public's long position.| SPCG Public vs. BCPG Public | SPCG Public vs. TPI Polene Power | SPCG Public vs. BTS Group Holdings | SPCG Public vs. Energy Absolute Public |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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