Correlation Between Tay Ninh and CEO Group
Can any of the company-specific risk be diversified away by investing in both Tay Ninh and CEO Group 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 Tay Ninh and CEO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tay Ninh Rubber and CEO Group JSC, you can compare the effects of market volatilities on Tay Ninh and CEO Group 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 Tay Ninh with a short position of CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and CEO Group.
Diversification Opportunities for Tay Ninh and CEO Group
Pay attention - limited upside
The 3 months correlation between Tay and CEO is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and Tay Ninh 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 Tay Ninh Rubber are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Tay Ninh i.e., Tay Ninh and CEO Group go up and down completely randomly.
Pair Corralation between Tay Ninh and CEO Group
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 1.7 times more return on investment than CEO Group. However, Tay Ninh is 1.7 times more volatile than CEO Group JSC. It trades about 0.52 of its potential returns per unit of risk. CEO Group JSC is currently generating about -0.01 per unit of risk. If you would invest 5,150,000 in Tay Ninh Rubber on November 7, 2024 and sell it today you would earn a total of 1,830,000 from holding Tay Ninh Rubber or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tay Ninh Rubber vs. CEO Group JSC
Performance |
| Timeline |
| Tay Ninh Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| CEO Group JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tay Ninh and CEO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and CEO Group
The main advantage of trading using opposite Tay Ninh and CEO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh position performs unexpectedly, CEO Group 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 CEO Group will offset losses from the drop in CEO Group's long position.The idea behind Tay Ninh Rubber and CEO Group JSC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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