Correlation Between Hochiminh City and Transport
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Transport 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 Transport 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 Transport and Industry, you can compare the effects of market volatilities on Hochiminh City and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Transport.
Diversification Opportunities for Hochiminh City and Transport
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hochiminh and Transport is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Hochiminh City i.e., Hochiminh City and Transport go up and down completely randomly.
Pair Corralation between Hochiminh City and Transport
Assuming the 90 days trading horizon Hochiminh City Metal is expected to generate 0.24 times more return on investment than Transport. However, Hochiminh City Metal is 4.13 times less risky than Transport. It trades about 0.06 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.14 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 | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Transport and Industry
Performance |
| Timeline |
| Hochiminh City Metal |
| Transport and Industry |
Hochiminh City and Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Transport
The main advantage of trading using opposite Hochiminh City and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport'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 |
| Transport vs. FIT INVEST JSC | Transport vs. Damsan JSC | Transport vs. An Phat Plastic | Transport vs. Alphanam ME |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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