Correlation Between La Hien and Danang Education
Can any of the company-specific risk be diversified away by investing in both La Hien and Danang Education 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 La Hien and Danang Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between La Hien Cement and Danang Education Investment, you can compare the effects of market volatilities on La Hien and Danang Education 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 La Hien with a short position of Danang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Hien and Danang Education.
Diversification Opportunities for La Hien and Danang Education
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CLH and Danang is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding La Hien Cement and Danang Education Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Education Inv and La Hien 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 La Hien Cement are associated (or correlated) with Danang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Education Inv has no effect on the direction of La Hien i.e., La Hien and Danang Education go up and down completely randomly.
Pair Corralation between La Hien and Danang Education
Assuming the 90 days trading horizon La Hien Cement is expected to under-perform the Danang Education. But the stock apears to be less risky and, when comparing its historical volatility, La Hien Cement is 6.35 times less risky than Danang Education. The stock trades about -0.14 of its potential returns per unit of risk. The Danang Education Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,070,000 in Danang Education Investment on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Danang Education Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
La Hien Cement vs. Danang Education Investment
Performance |
| Timeline |
| La Hien Cement |
| Danang Education Inv |
La Hien and Danang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with La Hien and Danang Education
The main advantage of trading using opposite La Hien and Danang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Hien position performs unexpectedly, Danang Education 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 Danang Education will offset losses from the drop in Danang Education's long position.| La Hien vs. Hochiminh City Metal | La Hien vs. Pacific Petroleum Transportation | La Hien vs. Petrolimex Information Technology | La Hien vs. Vietnam Petroleum Transport |
| Danang Education vs. SCG Construction JSC | Danang Education vs. Song Hong Construction | Danang Education vs. Viet Thanh Plastic | Danang Education vs. Binhthuan Agriculture Services |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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