Correlation Between Thanh Dat and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both Thanh Dat and Hoang Huy 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 Thanh Dat and Hoang Huy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanh Dat Investment and Hoang Huy Investment, you can compare the effects of market volatilities on Thanh Dat and Hoang Huy 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 Thanh Dat with a short position of Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Hoang Huy.
Diversification Opportunities for Thanh Dat and Hoang Huy
Weak diversification
The 3 months correlation between Thanh and Hoang is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment and Thanh Dat 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 Thanh Dat Investment are associated (or correlated) with Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of Thanh Dat i.e., Thanh Dat and Hoang Huy go up and down completely randomly.
Pair Corralation between Thanh Dat and Hoang Huy
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 1.31 times more return on investment than Hoang Huy. However, Thanh Dat is 1.31 times more volatile than Hoang Huy Investment. It trades about 0.08 of its potential returns per unit of risk. Hoang Huy Investment is currently generating about 0.07 per unit of risk. If you would invest 945,180 in Thanh Dat Investment on October 16, 2024 and sell it today you would earn a total of 1,624,820 from holding Thanh Dat Investment or generate 171.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanh Dat Investment vs. Hoang Huy Investment
Performance |
| Timeline |
| Thanh Dat Investment |
| Hoang Huy Investment |
Thanh Dat and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Hoang Huy
The main advantage of trading using opposite Thanh Dat and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat position performs unexpectedly, Hoang Huy 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 Hoang Huy will offset losses from the drop in Hoang Huy's long position.| Thanh Dat vs. Hai An Transport | Thanh Dat vs. Danang Education Investment | Thanh Dat vs. Hoang Huy Investment | Thanh Dat vs. Vietnam Petroleum Transport |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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