Correlation Between Vietnam JSCmmercial and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial 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 Vietnam JSCmmercial and Phuoc Hoa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam JSCmmercial Bank and Phuoc Hoa Rubber, you can compare the effects of market volatilities on Vietnam JSCmmercial 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 Vietnam JSCmmercial with a short position of Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and Phuoc Hoa.
Diversification Opportunities for Vietnam JSCmmercial and Phuoc Hoa
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vietnam and Phuoc is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial 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 Vietnam JSCmmercial Bank 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 Vietnam JSCmmercial i.e., Vietnam JSCmmercial and Phuoc Hoa go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and Phuoc Hoa
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 1.22 times more return on investment than Phuoc Hoa. However, Vietnam JSCmmercial is 1.22 times more volatile than Phuoc Hoa Rubber. It trades about 0.14 of its potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about 0.16 per unit of risk. If you would invest 3,495,000 in Vietnam JSCmmercial Bank on September 12, 2024 and sell it today you would earn a total of 140,000 from holding Vietnam JSCmmercial Bank or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| Phuoc Hoa Rubber |
Vietnam JSCmmercial and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and Phuoc Hoa
The main advantage of trading using opposite Vietnam JSCmmercial and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial 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.| Vietnam JSCmmercial vs. Petrolimex International Trading | Vietnam JSCmmercial vs. Travel Investment and | Vietnam JSCmmercial vs. Construction And Investment | Vietnam JSCmmercial vs. LDG Investment JSC |
| Phuoc Hoa vs. FIT INVEST JSC | Phuoc Hoa vs. Damsan JSC | Phuoc Hoa vs. An Phat Plastic | Phuoc Hoa vs. Alphanam ME |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |