Correlation Between Hochiminh City and Plastic Additives
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Plastic Additives 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 Plastic Additives 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 Plastic Additives JSC, you can compare the effects of market volatilities on Hochiminh City and Plastic Additives 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 Plastic Additives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Plastic Additives.
Diversification Opportunities for Hochiminh City and Plastic Additives
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochiminh and Plastic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Plastic Additives JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Additives JSC 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 Plastic Additives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Additives JSC has no effect on the direction of Hochiminh City i.e., Hochiminh City and Plastic Additives go up and down completely randomly.
Pair Corralation between Hochiminh City and Plastic Additives
Assuming the 90 days trading horizon Hochiminh City is expected to generate 9.92 times less return on investment than Plastic Additives. But when comparing it to its historical volatility, Hochiminh City Metal is 5.58 times less risky than Plastic Additives. It trades about 0.1 of its potential returns per unit of risk. Plastic Additives JSC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 840,000 in Plastic Additives JSC on September 2, 2024 and sell it today you would earn a total of 140,000 from holding Plastic Additives JSC or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hochiminh City Metal vs. Plastic Additives JSC
Performance |
| Timeline |
| Hochiminh City Metal |
| Plastic Additives JSC |
Hochiminh City and Plastic Additives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Plastic Additives
The main advantage of trading using opposite Hochiminh City and Plastic Additives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Plastic Additives 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 Plastic Additives will offset losses from the drop in Plastic Additives' long position.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
| Plastic Additives vs. Song Hong Garment | Plastic Additives vs. Alphanam ME | Plastic Additives vs. Hochiminh City Metal | Plastic Additives vs. Atesco Industrial Cartering |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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