Correlation Between Ducgiang Chemicals and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Ducgiang Chemicals and Bao Ngoc 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 Ducgiang Chemicals and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ducgiang Chemicals Detergent and Bao Ngoc Investment, you can compare the effects of market volatilities on Ducgiang Chemicals and Bao Ngoc 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 Ducgiang Chemicals with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ducgiang Chemicals and Bao Ngoc.
Diversification Opportunities for Ducgiang Chemicals and Bao Ngoc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ducgiang and Bao is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ducgiang Chemicals Detergent and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and Ducgiang Chemicals 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 Ducgiang Chemicals Detergent are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Ducgiang Chemicals i.e., Ducgiang Chemicals and Bao Ngoc go up and down completely randomly.
Pair Corralation between Ducgiang Chemicals and Bao Ngoc
Assuming the 90 days trading horizon Ducgiang Chemicals Detergent is expected to generate 0.8 times more return on investment than Bao Ngoc. However, Ducgiang Chemicals Detergent is 1.25 times less risky than Bao Ngoc. It trades about 0.09 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about 0.0 per unit of risk. If you would invest 5,082,174 in Ducgiang Chemicals Detergent on October 26, 2024 and sell it today you would earn a total of 6,057,826 from holding Ducgiang Chemicals Detergent or generate 119.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ducgiang Chemicals Detergent vs. Bao Ngoc Investment
Performance |
| Timeline |
| Ducgiang Chemicals |
| Bao Ngoc Investment |
Ducgiang Chemicals and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ducgiang Chemicals and Bao Ngoc
The main advantage of trading using opposite Ducgiang Chemicals and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ducgiang Chemicals position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals vs. APG Securities Joint |
| Bao Ngoc vs. Danang Rubber JSC | Bao Ngoc vs. Tien Phong Plastic | Bao Ngoc vs. VTC Telecommunications JSC | Bao Ngoc vs. Phuoc Hoa Rubber |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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