Correlation Between Astar and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both Astar and Hoang Huy 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 Astar and Hoang Huy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Hoang Huy Investment, you can compare the effects of market volatilities on Astar and Hoang Huy 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 Astar with a short position of Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Hoang Huy.
Diversification Opportunities for Astar and Hoang Huy
Poor diversification
The 3 months correlation between Astar and Hoang is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment and Astar 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 Astar are associated (or correlated) with Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of Astar i.e., Astar and Hoang Huy go up and down completely randomly.
Pair Corralation between Astar and Hoang Huy
Assuming the 90 days trading horizon Astar is expected to under-perform the Hoang Huy. In addition to that, Astar is 3.75 times more volatile than Hoang Huy Investment. It trades about -0.14 of its total potential returns per unit of risk. Hoang Huy Investment is currently generating about -0.16 per unit of volatility. If you would invest 746,000 in Hoang Huy Investment on October 16, 2024 and sell it today you would lose (38,000) from holding Hoang Huy Investment or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astar vs. Hoang Huy Investment
Performance |
| Timeline |
| Astar |
| Hoang Huy Investment |
Astar and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Hoang Huy
The main advantage of trading using opposite Astar and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Hoang Huy 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 Hoang Huy will offset losses from the drop in Hoang Huy's long position.The idea behind Astar and Hoang Huy Investment 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.| Hoang Huy vs. An Phat Plastic | Hoang Huy vs. Vincom Retail JSC | Hoang Huy vs. Thong Nhat Rubber | Hoang Huy vs. LDG Investment JSC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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