Correlation Between Phuoc Hoa and Pha Lai
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and Pha Lai 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 Pha Lai 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 Pha Lai Thermal, you can compare the effects of market volatilities on Phuoc Hoa and Pha Lai 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 Pha Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Pha Lai.
Diversification Opportunities for Phuoc Hoa and Pha Lai
Modest diversification
The 3 months correlation between Phuoc and Pha is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Pha Lai Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Lai Thermal 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 Pha Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Lai Thermal has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Pha Lai go up and down completely randomly.
Pair Corralation between Phuoc Hoa and Pha Lai
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to generate 0.91 times more return on investment than Pha Lai. However, Phuoc Hoa Rubber is 1.1 times less risky than Pha Lai. It trades about 0.2 of its potential returns per unit of risk. Pha Lai Thermal is currently generating about -0.41 per unit of risk. If you would invest 5,470,000 in Phuoc Hoa Rubber on September 5, 2024 and sell it today you would earn a total of 300,000 from holding Phuoc Hoa Rubber or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. Pha Lai Thermal
Performance |
| Timeline |
| Phuoc Hoa Rubber |
| Pha Lai Thermal |
Phuoc Hoa and Pha Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phuoc Hoa and Pha Lai
The main advantage of trading using opposite Phuoc Hoa and Pha Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, Pha Lai 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 Lai will offset losses from the drop in Pha Lai's long position.| Phuoc Hoa vs. FIT INVEST JSC | Phuoc Hoa vs. Damsan JSC | Phuoc Hoa vs. An Phat Plastic | Phuoc Hoa vs. Alphanam ME |
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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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