Correlation Between Hoa Phat and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Hoa Phat and Thanh Dat 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 Hoa Phat and Thanh Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoa Phat Group and Thanh Dat Investment, you can compare the effects of market volatilities on Hoa Phat and Thanh Dat 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 Hoa Phat with a short position of Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoa Phat and Thanh Dat.
Diversification Opportunities for Hoa Phat and Thanh Dat
Very weak diversification
The 3 months correlation between Hoa and Thanh is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hoa Phat Group and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat Investment and Hoa Phat 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 Hoa Phat Group are associated (or correlated) with Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Hoa Phat i.e., Hoa Phat and Thanh Dat go up and down completely randomly.
Pair Corralation between Hoa Phat and Thanh Dat
Assuming the 90 days trading horizon Hoa Phat is expected to generate 2.38 times less return on investment than Thanh Dat. But when comparing it to its historical volatility, Hoa Phat Group is 2.05 times less risky than Thanh Dat. It trades about 0.04 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,086,956 in Thanh Dat Investment on September 14, 2024 and sell it today you would earn a total of 603,044 from holding Thanh Dat Investment or generate 28.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoa Phat Group vs. Thanh Dat Investment
Performance |
| Timeline |
| Hoa Phat Group |
| Thanh Dat Investment |
Hoa Phat and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoa Phat and Thanh Dat
The main advantage of trading using opposite Hoa Phat and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoa Phat position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.| Hoa Phat vs. Thanh Dat Investment | Hoa Phat vs. HUD1 Investment and | Hoa Phat vs. Nam Kim Steel | Hoa Phat vs. Educational Book In |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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