Correlation Between DIC Holdings and Kien Giang

Can any of the company-specific risk be diversified away by investing in both DIC Holdings and Kien Giang 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 DIC Holdings and Kien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DIC Holdings Construction and Kien Giang Construction, you can compare the effects of market volatilities on DIC Holdings and Kien Giang 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 DIC Holdings with a short position of Kien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIC Holdings and Kien Giang.

Diversification Opportunities for DIC Holdings and Kien Giang

-0.87

Correlation Coefficient

DIC Holdings  Kien Giang

Pay attention - limited upside

The 3 months correlation between DIC and Kien is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding DIC Holdings Construction and Kien Giang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kien Giang Construction and DIC Holdings 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 DIC Holdings Construction are associated (or correlated) with Kien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kien Giang Construction has no effect on the direction of DIC Holdings i.e., DIC Holdings and Kien Giang go up and down completely randomly.

Pair Corralation between DIC Holdings and Kien Giang

Assuming the 90 days trading horizon DIC Holdings Construction is expected to generate 1.64 times more return on investment than Kien Giang. However, DIC Holdings is 1.64 times more volatile than Kien Giang Construction. It trades about 0.12 of its potential returns per unit of risk. Kien Giang Construction is currently generating about -0.09 per unit of risk. If you would invest  1,100,000  in DIC Holdings Construction on September 15, 2024 and sell it today you would earn a total of  230,000  from holding DIC Holdings Construction or generate 20.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

DIC Holdings Construction  vs.  Kien Giang Construction

DIC Holdings Construction

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DIC Holdings Construction are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIC Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Kien Giang Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kien Giang Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with DIC Holdings and Kien Giang

The main advantage of trading using opposite DIC Holdings and Kien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIC Holdings position performs unexpectedly, Kien Giang 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 Kien Giang will offset losses from the drop in Kien Giang's long position.

The idea behind DIC Holdings Construction and Kien Giang Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.