Correlation Between Hochiminh City and POST TELECOMMU
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and POST TELECOMMU 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 POST TELECOMMU 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 POST TELECOMMU, you can compare the effects of market volatilities on Hochiminh City and POST TELECOMMU 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 POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and POST TELECOMMU.
Diversification Opportunities for Hochiminh City and POST TELECOMMU
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochiminh and POST is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU 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 POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of Hochiminh City i.e., Hochiminh City and POST TELECOMMU go up and down completely randomly.
Pair Corralation between Hochiminh City and POST TELECOMMU
Assuming the 90 days trading horizon Hochiminh City Metal is expected to generate 0.34 times more return on investment than POST TELECOMMU. However, Hochiminh City Metal is 2.97 times less risky than POST TELECOMMU. It trades about 0.07 of its potential returns per unit of risk. POST TELECOMMU is currently generating about -0.05 per unit of risk. If you would invest 1,105,000 in Hochiminh City Metal on August 31, 2024 and sell it today you would earn a total of 15,000 from holding Hochiminh City Metal or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Hochiminh City Metal vs. POST TELECOMMU
Performance |
| Timeline |
| Hochiminh City Metal |
| POST TELECOMMU |
Hochiminh City and POST TELECOMMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and POST TELECOMMU
The main advantage of trading using opposite Hochiminh City and POST TELECOMMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, POST TELECOMMU 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 POST TELECOMMU will offset losses from the drop in POST TELECOMMU's long position.| Hochiminh City vs. VTC Telecommunications JSC | Hochiminh City vs. DOMESCO Medical Import | Hochiminh City vs. Elcom Technology Communications | Hochiminh City vs. Tri Viet Management |
| POST TELECOMMU vs. Hanoi Beer Alcohol | POST TELECOMMU vs. PetroVietnam Transportation Corp | POST TELECOMMU vs. Sao Ta Foods | POST TELECOMMU vs. FPT Digital Retail |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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