Correlation Between Hanoi Plastics and Pha Le
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Hanoi Plastics and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Pha Le.
Diversification Opportunities for Hanoi Plastics and Pha Le
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanoi and Pha is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Pha Le go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Pha Le
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Pha Le. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.8 times less risky than Pha Le. The stock trades about -0.09 of its potential returns per unit of risk. The Pha Le Plastics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 447,000 in Pha Le Plastics on September 12, 2024 and sell it today you would earn a total of 21,000 from holding Pha Le Plastics or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Pha Le Plastics
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Pha Le Plastics |
Hanoi Plastics and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Pha Le
The main advantage of trading using opposite Hanoi Plastics and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le'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 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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