Correlation Between Hochiminh City and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Tin Nghia 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 Tin Nghia 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 Tin Nghia Industrial, you can compare the effects of market volatilities on Hochiminh City and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Tin Nghia.
Diversification Opportunities for Hochiminh City and Tin Nghia
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hochiminh and Tin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Hochiminh City i.e., Hochiminh City and Tin Nghia go up and down completely randomly.
Pair Corralation between Hochiminh City and Tin Nghia
Assuming the 90 days trading horizon Hochiminh City Metal is expected to generate 0.66 times more return on investment than Tin Nghia. However, Hochiminh City Metal is 1.51 times less risky than Tin Nghia. It trades about 0.04 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about 0.02 per unit of risk. If you would invest 904,675 in Hochiminh City Metal on August 29, 2024 and sell it today you would earn a total of 200,325 from holding Hochiminh City Metal or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Tin Nghia Industrial
Performance |
| Timeline |
| Hochiminh City Metal |
| Tin Nghia Industrial |
Hochiminh City and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Tin Nghia
The main advantage of trading using opposite Hochiminh City and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Hochiminh City vs. Saigon Telecommunication Technologies | Hochiminh City vs. Military Insurance Corp | Hochiminh City vs. VietinBank Securities JSC | Hochiminh City vs. Vietnam Dairy Products |
| Tin Nghia vs. Ben Thanh Rubber | Tin Nghia vs. Military Insurance Corp | Tin Nghia vs. FPT Digital Retail | Tin Nghia vs. Vietnam Airlines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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