Correlation Between Ha Long and KSD
Can any of the company-specific risk be diversified away by investing in both Ha Long and KSD 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 KSD 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 KSD, you can compare the effects of market volatilities on Ha Long and KSD 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 KSD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and KSD.
Diversification Opportunities for Ha Long and KSD
Average diversification
The 3 months correlation between HID and KSD is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and KSD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSD 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 KSD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSD has no effect on the direction of Ha Long i.e., Ha Long and KSD go up and down completely randomly.
Pair Corralation between Ha Long and KSD
Assuming the 90 days trading horizon Ha Long Investment is expected to under-perform the KSD. But the stock apears to be less risky and, when comparing its historical volatility, Ha Long Investment is 1.54 times less risky than KSD. The stock trades about -0.02 of its potential returns per unit of risk. The KSD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 580,000 in KSD on September 4, 2024 and sell it today you would lose (40,000) from holding KSD or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.21% |
| Values | Daily Returns |
Ha Long Investment vs. KSD
Performance |
| Timeline |
| Ha Long Investment |
| KSD |
Ha Long and KSD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Long and KSD
The main advantage of trading using opposite Ha Long and KSD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Long position performs unexpectedly, KSD 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 KSD will offset losses from the drop in KSD's long position.The idea behind Ha Long Investment and KSD 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.| KSD vs. Duong Hieu Trading | KSD vs. Ha Long Investment | KSD vs. Dinhvu Port Investment | KSD vs. Vina2 Investment and |
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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