Correlation Between Development Investment and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Development Investment 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 Development Investment and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Development Investment Construction and Hochiminh City Metal, you can compare the effects of market volatilities on Development Investment 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 Development Investment with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Development Investment and Hochiminh City.
Diversification Opportunities for Development Investment and Hochiminh City
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Development and Hochiminh is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Development Investment Constru 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 Development Investment 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 Development Investment Construction 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 Development Investment i.e., Development Investment and Hochiminh City go up and down completely randomly.
Pair Corralation between Development Investment and Hochiminh City
Assuming the 90 days trading horizon Development Investment Construction is expected to generate 3.1 times more return on investment than Hochiminh City. However, Development Investment is 3.1 times more volatile than Hochiminh City Metal. It trades about 0.04 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about 0.04 per unit of risk. If you would invest 523,810 in Development Investment Construction on September 2, 2024 and sell it today you would earn a total of 186,190 from holding Development Investment Construction or generate 35.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.4% |
| Values | Daily Returns |
Development Investment Constru vs. Hochiminh City Metal
Performance |
| Timeline |
| Development Investment |
| Hochiminh City Metal |
Development Investment and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Development Investment and Hochiminh City
The main advantage of trading using opposite Development Investment and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Development Investment 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.| Development Investment vs. Song Hong Garment | Development Investment vs. Alphanam ME | Development Investment vs. Hochiminh City Metal | Development Investment vs. Atesco Industrial Cartering |
| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |