Correlation Between Yong Concrete and BuilderSmart Public
Can any of the company-specific risk be diversified away by investing in both Yong Concrete and BuilderSmart Public 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 Yong Concrete and BuilderSmart Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yong Concrete PCL and BuilderSmart Public, you can compare the effects of market volatilities on Yong Concrete and BuilderSmart Public 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 Yong Concrete with a short position of BuilderSmart Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Concrete and BuilderSmart Public.
Diversification Opportunities for Yong Concrete and BuilderSmart Public
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yong and BuilderSmart is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Yong Concrete PCL and BuilderSmart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BuilderSmart Public and Yong Concrete 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 Yong Concrete PCL are associated (or correlated) with BuilderSmart Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BuilderSmart Public has no effect on the direction of Yong Concrete i.e., Yong Concrete and BuilderSmart Public go up and down completely randomly.
Pair Corralation between Yong Concrete and BuilderSmart Public
Assuming the 90 days trading horizon Yong Concrete PCL is expected to under-perform the BuilderSmart Public. In addition to that, Yong Concrete is 3.92 times more volatile than BuilderSmart Public. It trades about -0.24 of its total potential returns per unit of risk. BuilderSmart Public is currently generating about -0.15 per unit of volatility. If you would invest 181.00 in BuilderSmart Public on August 29, 2024 and sell it today you would lose (4.00) from holding BuilderSmart Public or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yong Concrete PCL vs. BuilderSmart Public
Performance |
| Timeline |
| Yong Concrete PCL |
| BuilderSmart Public |
Yong Concrete and BuilderSmart Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Concrete and BuilderSmart Public
The main advantage of trading using opposite Yong Concrete and BuilderSmart Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Concrete position performs unexpectedly, BuilderSmart Public 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 BuilderSmart Public will offset losses from the drop in BuilderSmart Public's long position.| Yong Concrete vs. Wave Entertainment Public | Yong Concrete vs. Vibhavadi Medical Center | Yong Concrete vs. TPI Polene Public | Yong Concrete vs. Asia Green Energy |
| BuilderSmart Public vs. Wave Entertainment Public | BuilderSmart Public vs. Vibhavadi Medical Center | BuilderSmart Public vs. TPI Polene Public | BuilderSmart Public vs. Asia Green Energy |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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