Correlation Between Da Cin and Kuo Yang
Can any of the company-specific risk be diversified away by investing in both Da Cin and Kuo Yang 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 Da Cin and Kuo Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and Kuo Yang Construction, you can compare the effects of market volatilities on Da Cin and Kuo Yang 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 Da Cin with a short position of Kuo Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and Kuo Yang.
Diversification Opportunities for Da Cin and Kuo Yang
Average diversification
The 3 months correlation between 2535 and Kuo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and Kuo Yang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Yang Construction and Da Cin 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 Da Cin Construction Co are associated (or correlated) with Kuo Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Yang Construction has no effect on the direction of Da Cin i.e., Da Cin and Kuo Yang go up and down completely randomly.
Pair Corralation between Da Cin and Kuo Yang
Assuming the 90 days trading horizon Da Cin Construction Co is expected to generate 0.67 times more return on investment than Kuo Yang. However, Da Cin Construction Co is 1.48 times less risky than Kuo Yang. It trades about 0.1 of its potential returns per unit of risk. Kuo Yang Construction is currently generating about -0.02 per unit of risk. If you would invest 5,030 in Da Cin Construction Co on September 26, 2024 and sell it today you would earn a total of 310.00 from holding Da Cin Construction Co or generate 6.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Da Cin Construction Co vs. Kuo Yang Construction
Performance |
Timeline |
Da Cin Construction |
Kuo Yang Construction |
Da Cin and Kuo Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Da Cin and Kuo Yang
The main advantage of trading using opposite Da Cin and Kuo Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin position performs unexpectedly, Kuo Yang 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 Kuo Yang will offset losses from the drop in Kuo Yang's long position.Da Cin vs. Yang Ming Marine | Da Cin vs. Evergreen Marine Corp | Da Cin vs. Eva Airways Corp | Da Cin vs. U Ming Marine Transport |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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