Correlation Between LDG Investment and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both LDG Investment and Phuoc Hoa 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 Phuoc Hoa 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 Phuoc Hoa Rubber, you can compare the effects of market volatilities on LDG Investment and Phuoc Hoa 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 Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Phuoc Hoa.
Diversification Opportunities for LDG Investment and Phuoc Hoa
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between LDG and Phuoc is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber 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 Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of LDG Investment i.e., LDG Investment and Phuoc Hoa go up and down completely randomly.
Pair Corralation between LDG Investment and Phuoc Hoa
Assuming the 90 days trading horizon LDG Investment JSC is expected to generate 1.19 times more return on investment than Phuoc Hoa. However, LDG Investment is 1.19 times more volatile than Phuoc Hoa Rubber. It trades about -0.04 of its potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about -0.15 per unit of risk. If you would invest 184,000 in LDG Investment JSC on October 30, 2024 and sell it today you would lose (5,000) from holding LDG Investment JSC or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| LDG Investment JSC |
| Phuoc Hoa Rubber |
LDG Investment and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Phuoc Hoa
The main advantage of trading using opposite LDG Investment and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa's long position.| LDG Investment vs. Development Investment Construction | LDG Investment vs. An Phat Plastic | LDG Investment vs. Transport and Industry | LDG Investment vs. Plastic Additives JSC |
| Phuoc Hoa vs. Industrial Urban Development | Phuoc Hoa vs. Plastic Additives JSC | Phuoc Hoa vs. Investment and Industrial | Phuoc Hoa vs. An Phat Plastic |
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 CEOs Directory module to screen CEOs from public companies around the world.
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