Correlation Between Phuoc Hoa and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and Bao Ngoc 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 Phuoc Hoa and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phuoc Hoa Rubber and Bao Ngoc Investment, you can compare the effects of market volatilities on Phuoc Hoa and Bao Ngoc 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 Phuoc Hoa with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Bao Ngoc.
Diversification Opportunities for Phuoc Hoa and Bao Ngoc
Weak diversification
The 3 months correlation between Phuoc and Bao is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and Phuoc Hoa 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 Phuoc Hoa Rubber are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Bao Ngoc go up and down completely randomly.
Pair Corralation between Phuoc Hoa and Bao Ngoc
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to generate 0.85 times more return on investment than Bao Ngoc. However, Phuoc Hoa Rubber is 1.18 times less risky than Bao Ngoc. It trades about 0.06 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about -0.4 per unit of risk. If you would invest 5,190,000 in Phuoc Hoa Rubber on November 5, 2024 and sell it today you would earn a total of 60,000 from holding Phuoc Hoa Rubber or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. Bao Ngoc Investment
Performance |
| Timeline |
| Phuoc Hoa Rubber |
| Bao Ngoc Investment |
Phuoc Hoa and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phuoc Hoa and Bao Ngoc
The main advantage of trading using opposite Phuoc Hoa and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| Phuoc Hoa vs. FIT INVEST JSC | Phuoc Hoa vs. Damsan JSC | Phuoc Hoa vs. An Phat Plastic | Phuoc Hoa vs. APG Securities Joint |
| Bao Ngoc vs. 1369 Construction JSC | Bao Ngoc vs. Development Investment Construction | Bao Ngoc vs. Da Nang Construction | Bao Ngoc vs. Viettel Construction 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |