Correlation Between Century Synthetic and Development Investment
Can any of the company-specific risk be diversified away by investing in both Century Synthetic and Development 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 Century Synthetic and Development Investment 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 Development Investment Construction, you can compare the effects of market volatilities on Century Synthetic and Development 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 Century Synthetic with a short position of Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Synthetic and Development Investment.
Diversification Opportunities for Century Synthetic and Development Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Century and Development is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Century Synthetic Fiber and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Century Synthetic i.e., Century Synthetic and Development Investment go up and down completely randomly.
Pair Corralation between Century Synthetic and Development Investment
Assuming the 90 days trading horizon Century Synthetic Fiber is expected to under-perform the Development Investment. In addition to that, Century Synthetic is 1.85 times more volatile than Development Investment Construction. It trades about -0.17 of its total potential returns per unit of risk. Development Investment Construction is currently generating about -0.13 per unit of volatility. If you would invest 1,600,000 in Development Investment Construction on October 20, 2024 and sell it today you would lose (20,000) from holding Development Investment Construction or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Century Synthetic Fiber vs. Development Investment Constru
Performance |
| Timeline |
| Century Synthetic Fiber |
| Development Investment |
Century Synthetic and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Synthetic and Development Investment
The main advantage of trading using opposite Century Synthetic and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Synthetic position performs unexpectedly, Development 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 Development Investment will offset losses from the drop in Development Investment's long position.| Century Synthetic vs. LDG Investment JSC | Century Synthetic vs. Hoang Huy Investment | Century Synthetic vs. HUD1 Investment and | Century Synthetic vs. Hanoi Beer Alcohol |
| Development Investment vs. Viet Thanh Plastic | Development Investment vs. Dong Nai Plastic | Development Investment vs. Tay Ninh Rubber | Development Investment vs. Century Synthetic Fiber |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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