Correlation Between Phuoc Hoa and HNX
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and HNX 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 HNX 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 HNX, you can compare the effects of market volatilities on Phuoc Hoa and HNX 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 HNX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and HNX.
Diversification Opportunities for Phuoc Hoa and HNX
Very poor diversification
The 3 months correlation between Phuoc and HNX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and HNX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNX 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 HNX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNX has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and HNX go up and down completely randomly.
Pair Corralation between Phuoc Hoa and HNX
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to generate 1.7 times more return on investment than HNX. However, Phuoc Hoa is 1.7 times more volatile than HNX. It trades about 0.05 of its potential returns per unit of risk. HNX is currently generating about 0.02 per unit of risk. If you would invest 4,046,345 in Phuoc Hoa Rubber on September 3, 2024 and sell it today you would earn a total of 1,593,655 from holding Phuoc Hoa Rubber or generate 39.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. HNX
Performance |
| Timeline |
Phuoc Hoa and HNX Volatility Contrast
Predicted Return Density |
| Returns |
Phuoc Hoa Rubber
Pair trading matchups for Phuoc Hoa
HNX
Pair trading matchups for HNX
Pair Trading with Phuoc Hoa and HNX
The main advantage of trading using opposite Phuoc Hoa and HNX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, HNX 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 HNX will offset losses from the drop in HNX's long position.| Phuoc Hoa vs. Materials Petroleum JSC | Phuoc Hoa vs. Hanoi Plastics JSC | Phuoc Hoa vs. Elcom Technology Communications | Phuoc Hoa vs. DIC Holdings Construction |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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