Correlation Between HVC Investment and Truong Thanh
Can any of the company-specific risk be diversified away by investing in both HVC Investment and Truong Thanh 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 HVC Investment and Truong Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HVC Investment and and Truong Thanh Furniture, you can compare the effects of market volatilities on HVC Investment and Truong Thanh 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 HVC Investment with a short position of Truong Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of HVC Investment and Truong Thanh.
Diversification Opportunities for HVC Investment and Truong Thanh
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HVC and Truong is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding HVC Investment and and Truong Thanh Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truong Thanh Furniture and HVC Investment 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 HVC Investment and are associated (or correlated) with Truong Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truong Thanh Furniture has no effect on the direction of HVC Investment i.e., HVC Investment and Truong Thanh go up and down completely randomly.
Pair Corralation between HVC Investment and Truong Thanh
Assuming the 90 days trading horizon HVC Investment and is expected to generate 1.06 times more return on investment than Truong Thanh. However, HVC Investment is 1.06 times more volatile than Truong Thanh Furniture. It trades about 0.07 of its potential returns per unit of risk. Truong Thanh Furniture is currently generating about -0.02 per unit of risk. If you would invest 469,000 in HVC Investment and on September 14, 2024 and sell it today you would earn a total of 431,000 from holding HVC Investment and or generate 91.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HVC Investment and vs. Truong Thanh Furniture
Performance |
| Timeline |
| HVC Investment |
| Truong Thanh Furniture |
HVC Investment and Truong Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HVC Investment and Truong Thanh
The main advantage of trading using opposite HVC Investment and Truong Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HVC Investment position performs unexpectedly, Truong Thanh 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 Truong Thanh will offset losses from the drop in Truong Thanh's long position.| HVC Investment vs. FIT INVEST JSC | HVC Investment vs. Damsan JSC | HVC Investment vs. An Phat Plastic | HVC Investment vs. Alphanam ME |
| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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