Correlation Between Hochiminh City and Phat Dat
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Phat Dat 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 Phat Dat 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 Phat Dat Real, you can compare the effects of market volatilities on Hochiminh City and Phat Dat 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 Phat Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Phat Dat.
Diversification Opportunities for Hochiminh City and Phat Dat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hochiminh and Phat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Phat Dat Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phat Dat Real 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 Phat Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phat Dat Real has no effect on the direction of Hochiminh City i.e., Hochiminh City and Phat Dat go up and down completely randomly.
Pair Corralation between Hochiminh City and Phat Dat
Assuming the 90 days trading horizon Hochiminh City Metal is expected to generate 0.71 times more return on investment than Phat Dat. However, Hochiminh City Metal is 1.41 times less risky than Phat Dat. It trades about 0.06 of its potential returns per unit of risk. Phat Dat Real is currently generating about -0.02 per unit of risk. If you would invest 940,043 in Hochiminh City Metal on September 4, 2024 and sell it today you would earn a total of 194,957 from holding Hochiminh City Metal or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Phat Dat Real
Performance |
| Timeline |
| Hochiminh City Metal |
| Phat Dat Real |
Hochiminh City and Phat Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Phat Dat
The main advantage of trading using opposite Hochiminh City and Phat Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Phat Dat 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 Phat Dat will offset losses from the drop in Phat Dat's long position.| Hochiminh City vs. HUD1 Investment and | Hochiminh City vs. Development Investment Construction | Hochiminh City vs. Vina2 Investment and | Hochiminh City vs. Bich Chi Food |
| Phat Dat vs. DIC Holdings Construction | Phat Dat vs. Viettel Construction JSC | Phat Dat vs. Da Nang Construction | Phat Dat vs. Vinhomes 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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