Correlation Between Song Hong and Din Capital
Can any of the company-specific risk be diversified away by investing in both Song Hong and Din Capital 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 Song Hong and Din Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Aluminum and Din Capital Investment, you can compare the effects of market volatilities on Song Hong and Din Capital 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 Song Hong with a short position of Din Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Din Capital.
Diversification Opportunities for Song Hong and Din Capital
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Song and Din is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Aluminum and Din Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Din Capital Investment and Song Hong 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 Song Hong Aluminum are associated (or correlated) with Din Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Din Capital Investment has no effect on the direction of Song Hong i.e., Song Hong and Din Capital go up and down completely randomly.
Pair Corralation between Song Hong and Din Capital
Assuming the 90 days trading horizon Song Hong Aluminum is expected to under-perform the Din Capital. In addition to that, Song Hong is 1.58 times more volatile than Din Capital Investment. It trades about -0.06 of its total potential returns per unit of risk. Din Capital Investment is currently generating about -0.05 per unit of volatility. If you would invest 1,040,000 in Din Capital Investment on September 15, 2024 and sell it today you would lose (20,000) from holding Din Capital Investment or give up 1.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Song Hong Aluminum vs. Din Capital Investment
Performance |
Timeline |
Song Hong Aluminum |
Din Capital Investment |
Song Hong and Din Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Song Hong and Din Capital
The main advantage of trading using opposite Song Hong and Din Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong position performs unexpectedly, Din Capital 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 Din Capital will offset losses from the drop in Din Capital's long position.Song Hong vs. Din Capital Investment | Song Hong vs. South Basic Chemicals | Song Hong vs. Telecoms Informatics JSC | Song Hong vs. Tien Giang Investment |
Din Capital vs. DIC Holdings Construction | Din Capital vs. Hochiminh City Metal | Din Capital vs. Binh Duong Trade | Din Capital vs. Kien Giang Construction |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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