Correlation Between Hanoi Plastics and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Hanoi Plastics and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Ducgiang Chemicals.
Diversification Opportunities for Hanoi Plastics and Ducgiang Chemicals
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanoi and Ducgiang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Ducgiang Chemicals
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Ducgiang Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.58 times less risky than Ducgiang Chemicals. The stock trades about -0.37 of its potential returns per unit of risk. The Ducgiang Chemicals Detergent is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 10,756,600 in Ducgiang Chemicals Detergent on August 27, 2024 and sell it today you would earn a total of 643,400 from holding Ducgiang Chemicals Detergent or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Ducgiang Chemicals |
Hanoi Plastics and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Ducgiang Chemicals
The main advantage of trading using opposite Hanoi Plastics and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Hanoi Plastics vs. FIT INVEST JSC | Hanoi Plastics vs. Damsan JSC | Hanoi Plastics vs. An Phat Plastic | Hanoi Plastics vs. APG Securities Joint |
| Ducgiang Chemicals vs. Hochiminh City Metal | Ducgiang Chemicals vs. Hanoi Plastics JSC | Ducgiang Chemicals vs. Petrovietnam Technical Services | Ducgiang Chemicals vs. Sao Ta Foods |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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