Correlation Between Idico JSC and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Idico JSC and Hochiminh City 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 Idico JSC and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Idico JSC and Hochiminh City Metal, you can compare the effects of market volatilities on Idico JSC and Hochiminh City 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 Idico JSC with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idico JSC and Hochiminh City.
Diversification Opportunities for Idico JSC and Hochiminh City
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Idico and Hochiminh is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Idico JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and Idico JSC 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 Idico JSC are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Idico JSC i.e., Idico JSC and Hochiminh City go up and down completely randomly.
Pair Corralation between Idico JSC and Hochiminh City
Assuming the 90 days trading horizon Idico JSC is expected to generate 1.89 times more return on investment than Hochiminh City. However, Idico JSC is 1.89 times more volatile than Hochiminh City Metal. It trades about 0.09 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.1 per unit of risk. If you would invest 5,280,000 in Idico JSC on August 25, 2024 and sell it today you would earn a total of 140,000 from holding Idico JSC or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Idico JSC vs. Hochiminh City Metal
Performance |
| Timeline |
| Idico JSC |
| Hochiminh City Metal |
Idico JSC and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Idico JSC and Hochiminh City
The main advantage of trading using opposite Idico JSC and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idico JSC position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Idico JSC vs. Industrial Urban Development | Idico JSC vs. VietinBank Securities JSC | Idico JSC vs. Tin Nghia Industrial | Idico JSC vs. Taseco Air Services |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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