Correlation Between Century Synthetic and 1369 Construction
Can any of the company-specific risk be diversified away by investing in both Century Synthetic and 1369 Construction 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 Century Synthetic and 1369 Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Synthetic Fiber and 1369 Construction JSC, you can compare the effects of market volatilities on Century Synthetic and 1369 Construction 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 Century Synthetic with a short position of 1369 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Synthetic and 1369 Construction.
Diversification Opportunities for Century Synthetic and 1369 Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Century and 1369 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Century Synthetic Fiber and 1369 Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1369 Construction JSC and Century Synthetic 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 Century Synthetic Fiber are associated (or correlated) with 1369 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1369 Construction JSC has no effect on the direction of Century Synthetic i.e., Century Synthetic and 1369 Construction go up and down completely randomly.
Pair Corralation between Century Synthetic and 1369 Construction
Assuming the 90 days trading horizon Century Synthetic Fiber is expected to generate 0.34 times more return on investment than 1369 Construction. However, Century Synthetic Fiber is 2.91 times less risky than 1369 Construction. It trades about -0.24 of its potential returns per unit of risk. 1369 Construction JSC is currently generating about -0.11 per unit of risk. If you would invest 2,555,000 in Century Synthetic Fiber on September 12, 2024 and sell it today you would lose (85,000) from holding Century Synthetic Fiber or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Synthetic Fiber vs. 1369 Construction JSC
Performance |
| Timeline |
| Century Synthetic Fiber |
| 1369 Construction JSC |
Century Synthetic and 1369 Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Synthetic and 1369 Construction
The main advantage of trading using opposite Century Synthetic and 1369 Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Synthetic position performs unexpectedly, 1369 Construction 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 1369 Construction will offset losses from the drop in 1369 Construction's long position.| Century Synthetic vs. FIT INVEST JSC | Century Synthetic vs. Damsan JSC | Century Synthetic vs. An Phat Plastic | Century Synthetic vs. Alphanam ME |
| 1369 Construction vs. FIT INVEST JSC | 1369 Construction vs. Damsan JSC | 1369 Construction vs. An Phat Plastic | 1369 Construction vs. Alphanam ME |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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