Correlation Between Da Nang and Phat Dat
Can any of the company-specific risk be diversified away by investing in both Da Nang and Phat Dat 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 Da Nang and Phat Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Nang Construction and Phat Dat Real, you can compare the effects of market volatilities on Da Nang and Phat Dat 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 Da Nang with a short position of Phat Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Nang and Phat Dat.
Diversification Opportunities for Da Nang and Phat Dat
Good diversification
The 3 months correlation between DXV and Phat is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Da Nang Construction and Phat Dat Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phat Dat Real and Da Nang 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 Da Nang Construction are associated (or correlated) with Phat Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phat Dat Real has no effect on the direction of Da Nang i.e., Da Nang and Phat Dat go up and down completely randomly.
Pair Corralation between Da Nang and Phat Dat
Assuming the 90 days trading horizon Da Nang Construction is expected to generate 1.68 times more return on investment than Phat Dat. However, Da Nang is 1.68 times more volatile than Phat Dat Real. It trades about 0.01 of its potential returns per unit of risk. Phat Dat Real is currently generating about -0.01 per unit of risk. If you would invest 374,000 in Da Nang Construction on September 5, 2024 and sell it today you would lose (4,000) from holding Da Nang Construction or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Da Nang Construction vs. Phat Dat Real
Performance |
| Timeline |
| Da Nang Construction |
| Phat Dat Real |
Da Nang and Phat Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Nang and Phat Dat
The main advantage of trading using opposite Da Nang and Phat Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Nang position performs unexpectedly, Phat Dat 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 Phat Dat will offset losses from the drop in Phat Dat's long position.The idea behind Da Nang Construction and Phat Dat Real pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Phat Dat vs. DIC Holdings Construction | Phat Dat vs. Viettel Construction JSC | Phat Dat vs. Da Nang Construction | Phat Dat vs. Vinhomes JSC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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