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
Poor diversification
The 3 months correlation between Hoa and Thanh is 0.65. 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 Group is expected to generate 0.67 times more return on investment than Thanh Dat. However, Hoa Phat Group is 1.5 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 -0.02 per unit of risk. If you would invest 2,525,000 in Hoa Phat Group on November 2, 2024 and sell it today you would earn a total of 130,000 from holding Hoa Phat Group or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. FIT INVEST JSC | Hoa Phat vs. Damsan JSC | Hoa Phat vs. An Phat Plastic | Hoa Phat vs. APG Securities Joint |
| Thanh Dat vs. Long Giang Investment | Thanh Dat vs. Everland Investment JSC | Thanh Dat vs. SMC Investment Trading | Thanh Dat vs. Tng Investment And |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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