Correlation Between Educational Book and Hoa Phat
Can any of the company-specific risk be diversified away by investing in both Educational Book and Hoa Phat 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 Educational Book and Hoa Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Educational Book In and Hoa Phat Group, you can compare the effects of market volatilities on Educational Book and Hoa Phat 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 Educational Book with a short position of Hoa Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Educational Book and Hoa Phat.
Diversification Opportunities for Educational Book and Hoa Phat
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Educational and Hoa is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Educational Book In and Hoa Phat Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoa Phat Group and Educational Book 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 Educational Book In are associated (or correlated) with Hoa Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoa Phat Group has no effect on the direction of Educational Book i.e., Educational Book and Hoa Phat go up and down completely randomly.
Pair Corralation between Educational Book and Hoa Phat
Assuming the 90 days trading horizon Educational Book In is expected to generate 2.77 times more return on investment than Hoa Phat. However, Educational Book is 2.77 times more volatile than Hoa Phat Group. It trades about 0.03 of its potential returns per unit of risk. Hoa Phat Group is currently generating about 0.04 per unit of risk. If you would invest 1,455,263 in Educational Book In on September 14, 2024 and sell it today you would earn a total of 94,737 from holding Educational Book In or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.06% |
| Values | Daily Returns |
Educational Book In vs. Hoa Phat Group
Performance |
| Timeline |
| Educational Book |
| Hoa Phat Group |
Educational Book and Hoa Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Educational Book and Hoa Phat
The main advantage of trading using opposite Educational Book and Hoa Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Educational Book position performs unexpectedly, Hoa Phat 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 Hoa Phat will offset losses from the drop in Hoa Phat's long position.| Educational Book vs. Song Hong Garment | Educational Book vs. Alphanam ME | Educational Book vs. Hochiminh City Metal | Educational Book vs. Atesco Industrial Cartering |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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