Correlation Between LDG Investment and Hoasen
Can any of the company-specific risk be diversified away by investing in both LDG Investment and Hoasen 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 LDG Investment and Hoasen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LDG Investment JSC and Hoasen Group, you can compare the effects of market volatilities on LDG Investment and Hoasen 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 LDG Investment with a short position of Hoasen. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Hoasen.
Diversification Opportunities for LDG Investment and Hoasen
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LDG and Hoasen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Hoasen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoasen Group and LDG 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 LDG Investment JSC are associated (or correlated) with Hoasen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoasen Group has no effect on the direction of LDG Investment i.e., LDG Investment and Hoasen go up and down completely randomly.
Pair Corralation between LDG Investment and Hoasen
Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Hoasen. In addition to that, LDG Investment is 1.14 times more volatile than Hoasen Group. It trades about -0.04 of its total potential returns per unit of risk. Hoasen Group is currently generating about 0.06 per unit of volatility. If you would invest 1,040,578 in Hoasen Group on September 14, 2024 and sell it today you would earn a total of 834,422 from holding Hoasen Group or generate 80.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. Hoasen Group
Performance |
| Timeline |
| LDG Investment JSC |
| Hoasen Group |
LDG Investment and Hoasen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Hoasen
The main advantage of trading using opposite LDG Investment and Hoasen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, Hoasen 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 Hoasen will offset losses from the drop in Hoasen's long position.| LDG Investment vs. FIT INVEST JSC | LDG Investment vs. Damsan JSC | LDG Investment vs. An Phat Plastic | LDG Investment 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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