Correlation Between Ha Long and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Ha Long and Bao Ngoc 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 Bao Ngoc 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 Bao Ngoc Investment, you can compare the effects of market volatilities on Ha Long and Bao Ngoc 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 Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and Bao Ngoc.
Diversification Opportunities for Ha Long and Bao Ngoc
Good diversification
The 3 months correlation between HID and Bao is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment 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 Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Ha Long i.e., Ha Long and Bao Ngoc go up and down completely randomly.
Pair Corralation between Ha Long and Bao Ngoc
Assuming the 90 days trading horizon Ha Long Investment is expected to under-perform the Bao Ngoc. But the stock apears to be less risky and, when comparing its historical volatility, Ha Long Investment is 3.88 times less risky than Bao Ngoc. The stock trades about -0.17 of its potential returns per unit of risk. The Bao Ngoc Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 944,000 in Bao Ngoc Investment on September 2, 2024 and sell it today you would earn a total of 16,000 from holding Bao Ngoc Investment or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ha Long Investment vs. Bao Ngoc Investment
Performance |
| Timeline |
| Ha Long Investment |
| Bao Ngoc Investment |
Ha Long and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Long and Bao Ngoc
The main advantage of trading using opposite Ha Long and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Long position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Ha Long vs. Thanh Dat Investment | Ha Long vs. Dinhvu Port Investment | Ha Long vs. Vu Dang Investment | Ha Long vs. Hai An 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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