Correlation Between Mekong Fisheries and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both Mekong Fisheries and Phuoc Hoa 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 Mekong Fisheries and Phuoc Hoa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekong Fisheries JSC and Phuoc Hoa Rubber, you can compare the effects of market volatilities on Mekong Fisheries and Phuoc Hoa 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 Mekong Fisheries with a short position of Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Phuoc Hoa.
Diversification Opportunities for Mekong Fisheries and Phuoc Hoa
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mekong and Phuoc is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Phuoc Hoa go up and down completely randomly.
Pair Corralation between Mekong Fisheries and Phuoc Hoa
Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to under-perform the Phuoc Hoa. In addition to that, Mekong Fisheries is 1.14 times more volatile than Phuoc Hoa Rubber. It trades about -0.05 of its total potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about 0.06 per unit of volatility. If you would invest 3,935,136 in Phuoc Hoa Rubber on August 24, 2024 and sell it today you would earn a total of 1,784,864 from holding Phuoc Hoa Rubber or generate 45.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Mekong Fisheries JSC vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| Mekong Fisheries JSC |
| Phuoc Hoa Rubber |
Mekong Fisheries and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekong Fisheries and Phuoc Hoa
The main advantage of trading using opposite Mekong Fisheries and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekong Fisheries position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa's long position.| Mekong Fisheries vs. FIT INVEST JSC | Mekong Fisheries vs. Damsan JSC | Mekong Fisheries vs. An Phat Plastic | Mekong Fisheries vs. APG Securities Joint |
| Phuoc Hoa vs. FIT INVEST JSC | Phuoc Hoa vs. Damsan JSC | Phuoc Hoa vs. An Phat Plastic | Phuoc Hoa vs. APG Securities Joint |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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