Correlation Between Tien Giang and Mechanics Construction
Can any of the company-specific risk be diversified away by investing in both Tien Giang and Mechanics 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 Tien Giang and Mechanics Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and Mechanics Construction and, you can compare the effects of market volatilities on Tien Giang and Mechanics 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 Tien Giang with a short position of Mechanics Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and Mechanics Construction.
Diversification Opportunities for Tien Giang and Mechanics Construction
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tien and Mechanics is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and Mechanics Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanics Construction and Tien Giang 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 Tien Giang Investment are associated (or correlated) with Mechanics Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechanics Construction has no effect on the direction of Tien Giang i.e., Tien Giang and Mechanics Construction go up and down completely randomly.
Pair Corralation between Tien Giang and Mechanics Construction
Assuming the 90 days trading horizon Tien Giang Investment is expected to generate 0.62 times more return on investment than Mechanics Construction. However, Tien Giang Investment is 1.62 times less risky than Mechanics Construction. It trades about 0.07 of its potential returns per unit of risk. Mechanics Construction and is currently generating about 0.01 per unit of risk. If you would invest 4,390,000 in Tien Giang Investment on September 12, 2024 and sell it today you would earn a total of 55,000 from holding Tien Giang Investment or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Tien Giang Investment vs. Mechanics Construction and
Performance |
| Timeline |
| Tien Giang Investment |
| Mechanics Construction |
Tien Giang and Mechanics Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Giang and Mechanics Construction
The main advantage of trading using opposite Tien Giang and Mechanics Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang position performs unexpectedly, Mechanics 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 Mechanics Construction will offset losses from the drop in Mechanics Construction's long position.| Tien Giang vs. FIT INVEST JSC | Tien Giang vs. Damsan JSC | Tien Giang vs. An Phat Plastic | Tien Giang 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 CEOs Directory module to screen CEOs from public companies around the world.
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