Correlation Between Exotic Food and Yong Concrete
Can any of the company-specific risk be diversified away by investing in both Exotic Food and Yong Concrete 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 Exotic Food and Yong Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exotic Food Public and Yong Concrete PCL, you can compare the effects of market volatilities on Exotic Food and Yong Concrete 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 Exotic Food with a short position of Yong Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exotic Food and Yong Concrete.
Diversification Opportunities for Exotic Food and Yong Concrete
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exotic and Yong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exotic Food Public and Yong Concrete PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Concrete PCL and Exotic Food 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 Exotic Food Public are associated (or correlated) with Yong Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Concrete PCL has no effect on the direction of Exotic Food i.e., Exotic Food and Yong Concrete go up and down completely randomly.
Pair Corralation between Exotic Food and Yong Concrete
Assuming the 90 days horizon Exotic Food Public is expected to under-perform the Yong Concrete. In addition to that, Exotic Food is 2.72 times more volatile than Yong Concrete PCL. It trades about -0.35 of its total potential returns per unit of risk. Yong Concrete PCL is currently generating about -0.27 per unit of volatility. If you would invest 108.00 in Yong Concrete PCL on October 23, 2024 and sell it today you would lose (6.00) from holding Yong Concrete PCL or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exotic Food Public vs. Yong Concrete PCL
Performance |
| Timeline |
| Exotic Food Public |
| Yong Concrete PCL |
Exotic Food and Yong Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exotic Food and Yong Concrete
The main advantage of trading using opposite Exotic Food and Yong Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exotic Food position performs unexpectedly, Yong Concrete 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 Yong Concrete will offset losses from the drop in Yong Concrete's long position.| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart Public |
| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group Public |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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