Correlation Between Mechanics Construction and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both Mechanics Construction and Hoang Huy 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 Mechanics Construction and Hoang Huy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Construction and and Hoang Huy Investment, you can compare the effects of market volatilities on Mechanics Construction and Hoang Huy 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 Mechanics Construction with a short position of Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Construction and Hoang Huy.
Diversification Opportunities for Mechanics Construction and Hoang Huy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mechanics and Hoang is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Construction and and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment and Mechanics Construction 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 Mechanics Construction and are associated (or correlated) with Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of Mechanics Construction i.e., Mechanics Construction and Hoang Huy go up and down completely randomly.
Pair Corralation between Mechanics Construction and Hoang Huy
Assuming the 90 days trading horizon Mechanics Construction is expected to generate 1.68 times less return on investment than Hoang Huy. But when comparing it to its historical volatility, Mechanics Construction and is 1.14 times less risky than Hoang Huy. It trades about 0.05 of its potential returns per unit of risk. Hoang Huy Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 366,003 in Hoang Huy Investment on October 16, 2024 and sell it today you would earn a total of 341,997 from holding Hoang Huy Investment or generate 93.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.87% |
| Values | Daily Returns |
Mechanics Construction and vs. Hoang Huy Investment
Performance |
| Timeline |
| Mechanics Construction |
| Hoang Huy Investment |
Mechanics Construction and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechanics Construction and Hoang Huy
The main advantage of trading using opposite Mechanics Construction and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Construction position performs unexpectedly, Hoang Huy 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 Hoang Huy will offset losses from the drop in Hoang Huy's long position.The idea behind Mechanics Construction and and Hoang Huy Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Hoang Huy vs. PV2 Investment JSC | Hoang Huy vs. Saigon Viendong Technology | Hoang Huy vs. Thanh Dat Investment | Hoang Huy vs. Riverway Management JSC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |