Correlation Between Thanh Dat and Hoa Phat
Can any of the company-specific risk be diversified away by investing in both Thanh Dat 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 Thanh Dat and Hoa Phat 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 Hoa Phat Group, you can compare the effects of market volatilities on Thanh Dat 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 Thanh Dat with a short position of Hoa Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Hoa Phat.
Diversification Opportunities for Thanh Dat and Hoa Phat
Modest diversification
The 3 months correlation between Thanh and Hoa is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment 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 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 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 Thanh Dat i.e., Thanh Dat and Hoa Phat go up and down completely randomly.
Pair Corralation between Thanh Dat and Hoa Phat
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 2.1 times more return on investment than Hoa Phat. However, Thanh Dat is 2.1 times more volatile than Hoa Phat Group. It trades about 0.07 of its potential returns per unit of risk. Hoa Phat Group is currently generating about 0.06 per unit of risk. If you would invest 1,073,724 in Thanh Dat Investment on December 4, 2024 and sell it today you would earn a total of 1,296,276 from holding Thanh Dat Investment or generate 120.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thanh Dat Investment vs. Hoa Phat Group
Performance |
| Timeline |
| Thanh Dat Investment |
| Hoa Phat Group |
Thanh Dat and Hoa Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Hoa Phat
The main advantage of trading using opposite Thanh Dat and Hoa Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat 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.| Thanh Dat vs. Vietnam National Reinsurance | Thanh Dat vs. Elcom Technology Communications | Thanh Dat vs. Saigon Telecommunication Technologies | Thanh Dat vs. Innovative Technology Development |
| Hoa Phat vs. Hanoi Beer Alcohol | Hoa Phat vs. Vien Dong Investment | Hoa Phat vs. Industrial Urban Development | Hoa Phat vs. Saigon Beer Alcohol |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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