Correlation Between Ha Noi and Phat Dat
Can any of the company-specific risk be diversified away by investing in both Ha Noi 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 Ha Noi and Phat Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ha Noi Education and Phat Dat Real, you can compare the effects of market volatilities on Ha Noi 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 Ha Noi with a short position of Phat Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Noi and Phat Dat.
Diversification Opportunities for Ha Noi and Phat Dat
Good diversification
The 3 months correlation between EID and Phat is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ha Noi Education 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 Ha Noi 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 Ha Noi Education 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 Ha Noi i.e., Ha Noi and Phat Dat go up and down completely randomly.
Pair Corralation between Ha Noi and Phat Dat
Assuming the 90 days trading horizon Ha Noi Education is expected to under-perform the Phat Dat. But the stock apears to be less risky and, when comparing its historical volatility, Ha Noi Education is 2.56 times less risky than Phat Dat. The stock trades about -0.32 of its potential returns per unit of risk. The Phat Dat Real is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,095,000 in Phat Dat Real on September 4, 2024 and sell it today you would lose (10,000) from holding Phat Dat Real or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Ha Noi Education vs. Phat Dat Real
Performance |
| Timeline |
| Ha Noi Education |
| Phat Dat Real |
Ha Noi and Phat Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Noi and Phat Dat
The main advantage of trading using opposite Ha Noi and Phat Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Noi 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 Ha Noi Education 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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