Correlation Between KSD and Pha Le
Can any of the company-specific risk be diversified away by investing in both KSD and Pha Le 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 KSD and Pha Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSD and Pha Le Plastics, you can compare the effects of market volatilities on KSD and Pha Le 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 KSD with a short position of Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSD and Pha Le.
Diversification Opportunities for KSD and Pha Le
Modest diversification
The 3 months correlation between KSD and Pha is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KSD and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics and KSD 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 KSD are associated (or correlated) with Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of KSD i.e., KSD and Pha Le go up and down completely randomly.
Pair Corralation between KSD and Pha Le
Assuming the 90 days trading horizon KSD is expected to generate 3.05 times more return on investment than Pha Le. However, KSD is 3.05 times more volatile than Pha Le Plastics. It trades about 0.08 of its potential returns per unit of risk. Pha Le Plastics is currently generating about -0.04 per unit of risk. If you would invest 380,000 in KSD on September 13, 2024 and sell it today you would earn a total of 110,000 from holding KSD or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.2% |
| Values | Daily Returns |
KSD vs. Pha Le Plastics
Performance |
| Timeline |
| KSD |
| Pha Le Plastics |
KSD and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSD and Pha Le
The main advantage of trading using opposite KSD and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSD position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| KSD vs. Transport and Industry | KSD vs. Vietnam Petroleum Transport | KSD vs. Vinhomes JSC | KSD vs. Hai An Transport |
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 Stocks Directory module to find actively traded stocks across global markets.
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