Correlation Between Hanoi Plastics and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Hochiminh City 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 Hochiminh City 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 Hochiminh City Metal, you can compare the effects of market volatilities on Hanoi Plastics and Hochiminh City 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 Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Hochiminh City.
Diversification Opportunities for Hanoi Plastics and Hochiminh City
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanoi and Hochiminh is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal 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 Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Hochiminh City go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Hochiminh City
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Hochiminh City. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.37 times less risky than Hochiminh City. The stock trades about -0.12 of its potential returns per unit of risk. The Hochiminh City Metal is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,175,000 in Hochiminh City Metal on August 30, 2024 and sell it today you would lose (60,000) from holding Hochiminh City Metal or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Hochiminh City Metal
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Hochiminh City Metal |
Hanoi Plastics and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Hochiminh City
The main advantage of trading using opposite Hanoi Plastics and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Hanoi Plastics vs. PVI Reinsurance Corp | Hanoi Plastics vs. IDJ FINANCIAL | Hanoi Plastics vs. Post and Telecommunications | Hanoi Plastics vs. VTC Telecommunications JSC |
| Hochiminh City vs. VTC Telecommunications JSC | Hochiminh City vs. DOMESCO Medical Import | Hochiminh City vs. Elcom Technology Communications | Hochiminh City vs. Tri Viet Management |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |