Correlation Between Hanoi Plastics and Picomat Plastic
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Picomat Plastic 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 Picomat Plastic 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 Picomat Plastic JSC, you can compare the effects of market volatilities on Hanoi Plastics and Picomat Plastic 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 Picomat Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Picomat Plastic.
Diversification Opportunities for Hanoi Plastics and Picomat Plastic
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanoi and Picomat is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Picomat Plastic JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picomat Plastic JSC 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 Picomat Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picomat Plastic JSC has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Picomat Plastic go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Picomat Plastic
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Picomat Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.26 times less risky than Picomat Plastic. The stock trades about -0.07 of its potential returns per unit of risk. The Picomat Plastic JSC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,000,000 in Picomat Plastic JSC on November 8, 2024 and sell it today you would earn a total of 340,000 from holding Picomat Plastic JSC or generate 34.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.18% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Picomat Plastic JSC
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Picomat Plastic JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Hanoi Plastics and Picomat Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Picomat Plastic
The main advantage of trading using opposite Hanoi Plastics and Picomat Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Picomat Plastic 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 Picomat Plastic will offset losses from the drop in Picomat Plastic's long position.| Hanoi Plastics vs. Binh Minh Plastics | Hanoi Plastics vs. Vnsteel Vicasa JSC | Hanoi Plastics vs. International Development Investment | Hanoi Plastics vs. Pha Le Plastics |
| Picomat Plastic vs. Duong Hieu Trading | Picomat Plastic vs. Fecon Mining JSC | Picomat Plastic vs. Nam Kim Steel |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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