Correlation Between Industrial Urban and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Industrial Urban and Hochiminh City 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 Industrial Urban and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Urban Development and Hochiminh City Metal, you can compare the effects of market volatilities on Industrial Urban and Hochiminh City 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 Industrial Urban with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Urban and Hochiminh City.
Diversification Opportunities for Industrial Urban and Hochiminh City
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and Hochiminh is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Urban Development and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and Industrial Urban 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 Industrial Urban Development are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Industrial Urban i.e., Industrial Urban and Hochiminh City go up and down completely randomly.
Pair Corralation between Industrial Urban and Hochiminh City
Assuming the 90 days trading horizon Industrial Urban Development is expected to generate 0.55 times more return on investment than Hochiminh City. However, Industrial Urban Development is 1.82 times less risky than Hochiminh City. It trades about 0.24 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about 0.03 per unit of risk. If you would invest 3,160,000 in Industrial Urban Development on October 25, 2024 and sell it today you would earn a total of 320,000 from holding Industrial Urban Development or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Urban Development vs. Hochiminh City Metal
Performance |
| Timeline |
| Industrial Urban Dev |
| Hochiminh City Metal |
Industrial Urban and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Urban and Hochiminh City
The main advantage of trading using opposite Industrial Urban and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Urban position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Industrial Urban vs. Truong Thanh Furniture | Industrial Urban vs. Transport and Industry | Industrial Urban vs. Song Hong Aluminum | Industrial Urban vs. Riverway Management JSC |
| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City 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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