Correlation Between IDJ FINANCIAL and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL and Hanoi Plastics 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 IDJ FINANCIAL and Hanoi Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and Hanoi Plastics JSC, you can compare the effects of market volatilities on IDJ FINANCIAL and Hanoi Plastics 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 IDJ FINANCIAL with a short position of Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and Hanoi Plastics.
Diversification Opportunities for IDJ FINANCIAL and Hanoi Plastics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDJ and Hanoi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and Hanoi Plastics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Plastics JSC and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with Hanoi Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Plastics JSC has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and Hanoi Plastics go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and Hanoi Plastics
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to generate 1.42 times more return on investment than Hanoi Plastics. However, IDJ FINANCIAL is 1.42 times more volatile than Hanoi Plastics JSC. It trades about 0.13 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about -0.01 per unit of risk. If you would invest 550,000 in IDJ FINANCIAL on November 29, 2024 and sell it today you would earn a total of 20,000 from holding IDJ FINANCIAL or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDJ FINANCIAL vs. Hanoi Plastics JSC
Performance |
| Timeline |
| IDJ FINANCIAL |
| Hanoi Plastics JSC |
IDJ FINANCIAL and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and Hanoi Plastics
The main advantage of trading using opposite IDJ FINANCIAL and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL position performs unexpectedly, Hanoi Plastics 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 Hanoi Plastics will offset losses from the drop in Hanoi Plastics' long position.| IDJ FINANCIAL vs. Ha Noi Education | IDJ FINANCIAL vs. Binh Minh Plastics | IDJ FINANCIAL vs. Picomat Plastic JSC | IDJ FINANCIAL vs. VietinBank Securities JSC |
| Hanoi Plastics vs. Post and Telecommunications | Hanoi Plastics vs. Fecon Mining JSC | Hanoi Plastics vs. Vietnam National Reinsurance | Hanoi Plastics vs. Ba Ria Thermal |
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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