Correlation Between Yong Concrete and Exotic Food
Can any of the company-specific risk be diversified away by investing in both Yong Concrete and Exotic Food 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 Exotic Food 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 Exotic Food Public, you can compare the effects of market volatilities on Yong Concrete and Exotic Food 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 Exotic Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Concrete and Exotic Food.
Diversification Opportunities for Yong Concrete and Exotic Food
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yong and Exotic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yong Concrete PCL and Exotic Food Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exotic Food 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 Exotic Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exotic Food Public has no effect on the direction of Yong Concrete i.e., Yong Concrete and Exotic Food go up and down completely randomly.
Pair Corralation between Yong Concrete and Exotic Food
Assuming the 90 days trading horizon Yong Concrete PCL is expected to generate 0.36 times more return on investment than Exotic Food. However, Yong Concrete PCL is 2.8 times less risky than Exotic Food. It trades about -0.27 of its potential returns per unit of risk. Exotic Food Public is currently generating about -0.27 per unit of risk. 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 | 95.0% |
| Values | Daily Returns |
Yong Concrete PCL vs. Exotic Food Public
Performance |
| Timeline |
| Yong Concrete PCL |
| Exotic Food Public |
Yong Concrete and Exotic Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Concrete and Exotic Food
The main advantage of trading using opposite Yong Concrete and Exotic Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Concrete position performs unexpectedly, Exotic Food 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 Exotic Food will offset losses from the drop in Exotic Food's long position.| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group Public |
| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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