Correlation Between Hochiminh City and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Hochiminh City and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Ducgiang Chemicals.
Diversification Opportunities for Hochiminh City and Ducgiang Chemicals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hochiminh and Ducgiang is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Hochiminh City i.e., Hochiminh City and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Hochiminh City and Ducgiang Chemicals
Assuming the 90 days trading horizon Hochiminh City Metal is expected to under-perform the Ducgiang Chemicals. In addition to that, Hochiminh City is 1.16 times more volatile than Ducgiang Chemicals Detergent. It trades about -0.03 of its total potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about 0.06 per unit of volatility. If you would invest 10,834,500 in Ducgiang Chemicals Detergent on August 29, 2024 and sell it today you would earn a total of 515,500 from holding Ducgiang Chemicals Detergent or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Hochiminh City Metal |
| Ducgiang Chemicals |
Hochiminh City and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Ducgiang Chemicals
The main advantage of trading using opposite Hochiminh City and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals vs. Alphanam ME |
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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