Correlation Between Hanoi Plastics and Dong A
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Dong A 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 Dong A 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 Dong A Hotel, you can compare the effects of market volatilities on Hanoi Plastics and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Dong A.
Diversification Opportunities for Hanoi Plastics and Dong A
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanoi and Dong is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Dong A go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Dong A
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to generate 1.09 times more return on investment than Dong A. However, Hanoi Plastics is 1.09 times more volatile than Dong A Hotel. It trades about 0.0 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.03 per unit of risk. If you would invest 1,481,290 in Hanoi Plastics JSC on November 1, 2024 and sell it today you would lose (176,290) from holding Hanoi Plastics JSC or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Dong A Hotel
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Dong A Hotel |
Hanoi Plastics and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Dong A
The main advantage of trading using opposite Hanoi Plastics and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Hanoi Plastics vs. Song Hong Construction | Hanoi Plastics vs. Agriculture Printing and | Hanoi Plastics vs. Nafoods Group JSC | Hanoi Plastics vs. PostTelecommunication Equipment |
| Dong A vs. Danang Rubber JSC | Dong A vs. Truong Thanh Furniture | Dong A vs. PostTelecommunication Equipment | Dong A vs. Elcom Technology Communications |
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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