Correlation Between Long Giang and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Long Giang 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 Long Giang and Hanoi Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Giang Investment and Hanoi Plastics JSC, you can compare the effects of market volatilities on Long Giang 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 Long Giang with a short position of Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Giang and Hanoi Plastics.
Diversification Opportunities for Long Giang and Hanoi Plastics
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Long and Hanoi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Long Giang Investment 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 Long Giang 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 Long Giang Investment 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 Long Giang i.e., Long Giang and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Long Giang and Hanoi Plastics
Assuming the 90 days trading horizon Long Giang Investment is expected to generate 2.11 times more return on investment than Hanoi Plastics. However, Long Giang is 2.11 times more volatile than Hanoi Plastics JSC. It trades about 0.07 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about -0.21 per unit of risk. If you would invest 248,000 in Long Giang Investment on October 12, 2024 and sell it today you would earn a total of 6,000 from holding Long Giang Investment or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Giang Investment vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Long Giang Investment |
| Hanoi Plastics JSC |
Long Giang and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Giang and Hanoi Plastics
The main advantage of trading using opposite Long Giang and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Giang 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.| Long Giang vs. Fecon Mining JSC | Long Giang vs. Investment and Industrial | Long Giang vs. Post and Telecommunications | Long Giang vs. Ducgiang Chemicals Detergent |
| Hanoi Plastics vs. IDJ FINANCIAL | Hanoi Plastics vs. SMC Investment Trading | Hanoi Plastics vs. Saigon Viendong Technology | Hanoi Plastics vs. Long Giang Investment |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |