Correlation Between Hochiminh City and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Asia Pacific 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 Hochiminh City and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochiminh City Metal and Asia Pacific Investment, you can compare the effects of market volatilities on Hochiminh City and Asia Pacific 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 Hochiminh City with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Asia Pacific.
Diversification Opportunities for Hochiminh City and Asia Pacific
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochiminh and Asia is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment and Hochiminh City 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 Hochiminh City Metal are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Hochiminh City i.e., Hochiminh City and Asia Pacific go up and down completely randomly.
Pair Corralation between Hochiminh City and Asia Pacific
Assuming the 90 days trading horizon Hochiminh City is expected to generate 2.45 times less return on investment than Asia Pacific. But when comparing it to its historical volatility, Hochiminh City Metal is 2.47 times less risky than Asia Pacific. It trades about 0.04 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 560,000 in Asia Pacific Investment on August 27, 2024 and sell it today you would earn a total of 160,000 from holding Asia Pacific Investment or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Hochiminh City Metal vs. Asia Pacific Investment
Performance |
| Timeline |
| Hochiminh City Metal |
| Asia Pacific Investment |
Hochiminh City and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Asia Pacific
The main advantage of trading using opposite Hochiminh City and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Hochiminh City vs. Tri Viet Management | Hochiminh City vs. Tay Ninh Rubber | Hochiminh City vs. Hanoi Plastics JSC | Hochiminh City vs. Post and Telecommunications |
| Asia Pacific vs. FIT INVEST JSC | Asia Pacific vs. Damsan JSC | Asia Pacific vs. An Phat Plastic | Asia Pacific 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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