Correlation Between Hochiminh City and Hung Hau
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Hung Hau 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 Hung Hau 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 Hung Hau Agricultural, you can compare the effects of market volatilities on Hochiminh City and Hung Hau 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 Hung Hau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Hung Hau.
Diversification Opportunities for Hochiminh City and Hung Hau
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochiminh and Hung is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Hung Hau Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Hau Agricultural 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 Hung Hau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Hau Agricultural has no effect on the direction of Hochiminh City i.e., Hochiminh City and Hung Hau go up and down completely randomly.
Pair Corralation between Hochiminh City and Hung Hau
Assuming the 90 days trading horizon Hochiminh City Metal is expected to under-perform the Hung Hau. But the stock apears to be less risky and, when comparing its historical volatility, Hochiminh City Metal is 2.56 times less risky than Hung Hau. The stock trades about -0.03 of its potential returns per unit of risk. The Hung Hau Agricultural is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,050,000 in Hung Hau Agricultural on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Hung Hau Agricultural or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.75% |
| Values | Daily Returns |
Hochiminh City Metal vs. Hung Hau Agricultural
Performance |
| Timeline |
| Hochiminh City Metal |
| Hung Hau Agricultural |
Hochiminh City and Hung Hau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Hung Hau
The main advantage of trading using opposite Hochiminh City and Hung Hau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Hung Hau 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 Hung Hau will offset losses from the drop in Hung Hau'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 |
| Hung Hau vs. Song Hong Garment | Hung Hau vs. Alphanam ME | Hung Hau vs. Hochiminh City Metal | Hung Hau 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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