Correlation Between Ha Long and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Ha Long and Binh Duong 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 Long and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ha Long Investment and Binh Duong Construction, you can compare the effects of market volatilities on Ha Long and Binh Duong 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 Long with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and Binh Duong.
Diversification Opportunities for Ha Long and Binh Duong
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HID and Binh is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and Binh Duong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Construction and Ha Long 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 Long Investment are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Construction has no effect on the direction of Ha Long i.e., Ha Long and Binh Duong go up and down completely randomly.
Pair Corralation between Ha Long and Binh Duong
Assuming the 90 days trading horizon Ha Long Investment is expected to under-perform the Binh Duong. But the stock apears to be less risky and, when comparing its historical volatility, Ha Long Investment is 2.62 times less risky than Binh Duong. The stock trades about -0.24 of its potential returns per unit of risk. The Binh Duong Construction is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 574,000 in Binh Duong Construction on August 30, 2024 and sell it today you would earn a total of 106,000 from holding Binh Duong Construction or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ha Long Investment vs. Binh Duong Construction
Performance |
| Timeline |
| Ha Long Investment |
| Binh Duong Construction |
Ha Long and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Long and Binh Duong
The main advantage of trading using opposite Ha Long and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Long position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| Ha Long vs. FIT INVEST JSC | Ha Long vs. Damsan JSC | Ha Long vs. An Phat Plastic | Ha Long vs. APG Securities Joint |
| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. APG Securities Joint |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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