Correlation Between Hanoi Plastics and Song Hong
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Song Hong 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 Song Hong 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 Song Hong Garment, you can compare the effects of market volatilities on Hanoi Plastics and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Song Hong.
Diversification Opportunities for Hanoi Plastics and Song Hong
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanoi and Song is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Song Hong Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Garment 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Garment has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Song Hong go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Song Hong
Assuming the 90 days trading horizon Hanoi Plastics is expected to generate 6.81 times less return on investment than Song Hong. In addition to that, Hanoi Plastics is 1.18 times more volatile than Song Hong Garment. It trades about 0.01 of its total potential returns per unit of risk. Song Hong Garment is currently generating about 0.07 per unit of volatility. If you would invest 2,874,374 in Song Hong Garment on September 4, 2024 and sell it today you would earn a total of 1,975,626 from holding Song Hong Garment or generate 68.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Song Hong Garment
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Song Hong Garment |
Hanoi Plastics and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Song Hong
The main advantage of trading using opposite Hanoi Plastics and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Hanoi Plastics vs. FIT INVEST JSC | Hanoi Plastics vs. Damsan JSC | Hanoi Plastics vs. An Phat Plastic | Hanoi Plastics vs. Alphanam ME |
| Song Hong vs. Tng Investment And | Song Hong vs. Construction And Investment | Song Hong vs. Vietnam Petroleum Transport | Song Hong vs. Danang Education Investment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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