Correlation Between Hanoi Plastics and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Southern Rubber 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 Hanoi Plastics and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Plastics JSC and Southern Rubber Industry, you can compare the effects of market volatilities on Hanoi Plastics and Southern Rubber 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 Hanoi Plastics with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Southern Rubber.
Diversification Opportunities for Hanoi Plastics and Southern Rubber
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanoi and Southern is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and Hanoi Plastics 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 Hanoi Plastics JSC are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Southern Rubber go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Southern Rubber
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Southern Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.42 times less risky than Southern Rubber. The stock trades about -0.07 of its potential returns per unit of risk. The Southern Rubber Industry is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,552,441 in Southern Rubber Industry on September 3, 2024 and sell it today you would lose (187,441) from holding Southern Rubber Industry or give up 12.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Southern Rubber Industry
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Southern Rubber Industry |
Hanoi Plastics and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Southern Rubber
The main advantage of trading using opposite Hanoi Plastics and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Southern Rubber 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 Southern Rubber will offset losses from the drop in Southern Rubber's long position.| Hanoi Plastics vs. Vu Dang Investment | Hanoi Plastics vs. Petrolimex International Trading | Hanoi Plastics vs. HUD1 Investment and | Hanoi Plastics vs. Vina2 Investment and |
| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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