Correlation Between Techno Agricultural and SMC Investment
Can any of the company-specific risk be diversified away by investing in both Techno Agricultural and SMC 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 Techno Agricultural and SMC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techno Agricultural Supplying and SMC Investment Trading, you can compare the effects of market volatilities on Techno Agricultural and SMC 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 Techno Agricultural with a short position of SMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and SMC Investment.
Diversification Opportunities for Techno Agricultural and SMC Investment
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Techno and SMC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and SMC Investment Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Investment Trading and Techno Agricultural 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 Techno Agricultural Supplying are associated (or correlated) with SMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Investment Trading has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and SMC Investment go up and down completely randomly.
Pair Corralation between Techno Agricultural and SMC Investment
Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the SMC Investment. But the stock apears to be less risky and, when comparing its historical volatility, Techno Agricultural Supplying is 1.28 times less risky than SMC Investment. The stock trades about -0.03 of its potential returns per unit of risk. The SMC Investment Trading is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 971,000 in SMC Investment Trading on October 30, 2024 and sell it today you would lose (341,000) from holding SMC Investment Trading or give up 35.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techno Agricultural Supplying vs. SMC Investment Trading
Performance |
| Timeline |
| Techno Agricultural |
| SMC Investment Trading |
Techno Agricultural and SMC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techno Agricultural and SMC Investment
The main advantage of trading using opposite Techno Agricultural and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techno Agricultural position performs unexpectedly, SMC 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 SMC Investment will offset losses from the drop in SMC Investment's long position.| Techno Agricultural vs. Elcom Technology Communications | Techno Agricultural vs. PVI Reinsurance Corp | Techno Agricultural vs. BIDV Insurance Corp | Techno Agricultural vs. Petrovietnam Drilling Mud |
| SMC Investment vs. TDT Investment and | SMC Investment vs. Vincom Retail JSC | SMC Investment vs. Dinhvu Port Investment | SMC Investment vs. Japan Vietnam Medical |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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