Correlation Between Hanoi Plastics and Van Phat
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics and Van Phat 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 Van Phat 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 Van Phat Hung, you can compare the effects of market volatilities on Hanoi Plastics and Van Phat 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 Van Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Van Phat.
Diversification Opportunities for Hanoi Plastics and Van Phat
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanoi and Van is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC and Van Phat Hung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Phat Hung 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 Van Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Phat Hung has no effect on the direction of Hanoi Plastics i.e., Hanoi Plastics and Van Phat go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Van Phat
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to under-perform the Van Phat. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Plastics JSC is 1.5 times less risky than Van Phat. The stock trades about -0.29 of its potential returns per unit of risk. The Van Phat Hung is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 783,000 in Van Phat Hung on September 2, 2024 and sell it today you would lose (58,000) from holding Van Phat Hung or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Van Phat Hung
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Van Phat Hung |
Hanoi Plastics and Van Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Van Phat
The main advantage of trading using opposite Hanoi Plastics and Van Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics position performs unexpectedly, Van Phat 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 Van Phat will offset losses from the drop in Van Phat'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 |
| Van Phat vs. Ha Long Investment | Van Phat vs. Danang Education Investment | Van Phat vs. Nam Kim Steel | Van Phat vs. PV2 Investment JSC |
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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