Correlation Between Duong Hieu and Song Hong
Can any of the company-specific risk be diversified away by investing in both Duong Hieu and Song Hong 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 Duong Hieu and Song Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duong Hieu Trading and Song Hong Construction, you can compare the effects of market volatilities on Duong Hieu and Song Hong 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 Duong Hieu with a short position of Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duong Hieu and Song Hong.
Diversification Opportunities for Duong Hieu and Song Hong
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duong and Song is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Duong Hieu Trading and Song Hong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Construction and Duong Hieu 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 Duong Hieu Trading are associated (or correlated) with Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Construction has no effect on the direction of Duong Hieu i.e., Duong Hieu and Song Hong go up and down completely randomly.
Pair Corralation between Duong Hieu and Song Hong
Assuming the 90 days trading horizon Duong Hieu Trading is expected to under-perform the Song Hong. But the stock apears to be less risky and, when comparing its historical volatility, Duong Hieu Trading is 1.25 times less risky than Song Hong. The stock trades about -0.02 of its potential returns per unit of risk. The Song Hong Construction is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 555,776 in Song Hong Construction on August 27, 2024 and sell it today you would earn a total of 134,224 from holding Song Hong Construction or generate 24.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.11% |
| Values | Daily Returns |
Duong Hieu Trading vs. Song Hong Construction
Performance |
| Timeline |
| Duong Hieu Trading |
| Song Hong Construction |
Duong Hieu and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duong Hieu and Song Hong
The main advantage of trading using opposite Duong Hieu and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duong Hieu position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Duong Hieu vs. FIT INVEST JSC | Duong Hieu vs. Damsan JSC | Duong Hieu vs. An Phat Plastic | Duong Hieu vs. APG Securities Joint |
| Song Hong vs. Petrolimex International Trading | Song Hong vs. Dinhvu Port Investment | Song Hong vs. Duong Hieu Trading | Song Hong vs. POST TELECOMMU |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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