Correlation Between Hochiminh City and Vinacomin Power
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Vinacomin Power 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 Vinacomin Power 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 Vinacomin Power Holding, you can compare the effects of market volatilities on Hochiminh City and Vinacomin Power 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 Vinacomin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Vinacomin Power.
Diversification Opportunities for Hochiminh City and Vinacomin Power
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochiminh and Vinacomin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Vinacomin Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinacomin Power Holding 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 Vinacomin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinacomin Power Holding has no effect on the direction of Hochiminh City i.e., Hochiminh City and Vinacomin Power go up and down completely randomly.
Pair Corralation between Hochiminh City and Vinacomin Power
Assuming the 90 days trading horizon Hochiminh City is expected to generate 1.09 times less return on investment than Vinacomin Power. But when comparing it to its historical volatility, Hochiminh City Metal is 2.0 times less risky than Vinacomin Power. It trades about 0.06 of its potential returns per unit of risk. Vinacomin Power Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,075,313 in Vinacomin Power Holding on September 12, 2024 and sell it today you would earn a total of 114,687 from holding Vinacomin Power Holding or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.11% |
| Values | Daily Returns |
Hochiminh City Metal vs. Vinacomin Power Holding
Performance |
| Timeline |
| Hochiminh City Metal |
| Vinacomin Power Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hochiminh City and Vinacomin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Vinacomin Power
The main advantage of trading using opposite Hochiminh City and Vinacomin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Vinacomin Power 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 Vinacomin Power will offset losses from the drop in Vinacomin Power's long position.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
| Vinacomin Power vs. Post and Telecommunications | Vinacomin Power vs. Elcom Technology Communications | Vinacomin Power vs. Petrolimex Information Technology | Vinacomin Power vs. Global Electrical Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |