Correlation Between Ha Long and Development Investment
Can any of the company-specific risk be diversified away by investing in both Ha Long and Development Investment 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 Development Investment 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 Development Investment Construction, you can compare the effects of market volatilities on Ha Long and Development Investment 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 Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and Development Investment.
Diversification Opportunities for Ha Long and Development Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HID and Development is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Ha Long i.e., Ha Long and Development Investment go up and down completely randomly.
Pair Corralation between Ha Long and Development Investment
Assuming the 90 days trading horizon Ha Long Investment is expected to generate 0.39 times more return on investment than Development Investment. However, Ha Long Investment is 2.56 times less risky than Development Investment. It trades about -0.04 of its potential returns per unit of risk. Development Investment Construction is currently generating about -0.03 per unit of risk. If you would invest 277,000 in Ha Long Investment on August 31, 2024 and sell it today you would lose (10,000) from holding Ha Long Investment or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.58% |
| Values | Daily Returns |
Ha Long Investment vs. Development Investment Constru
Performance |
| Timeline |
| Ha Long Investment |
| Development Investment |
Ha Long and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Long and Development Investment
The main advantage of trading using opposite Ha Long and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Long position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Ha Long vs. Binhthuan Agriculture Services | Ha Long vs. Century Synthetic Fiber | Ha Long vs. Cotec Construction JSC | Ha Long vs. Transport and Industry |
| Development Investment vs. Telecoms Informatics JSC | Development Investment vs. Thanh Dat Investment | Development Investment vs. Vien Dong Investment | Development Investment vs. Everland Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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