Correlation Between Phuoc Hoa and Vu Dang
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and Vu Dang 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 Vu Dang 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 Vu Dang Investment, you can compare the effects of market volatilities on Phuoc Hoa and Vu Dang 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 Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Vu Dang.
Diversification Opportunities for Phuoc Hoa and Vu Dang
Weak diversification
The 3 months correlation between Phuoc and SVD is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang 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 Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Vu Dang go up and down completely randomly.
Pair Corralation between Phuoc Hoa and Vu Dang
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to under-perform the Vu Dang. But the stock apears to be less risky and, when comparing its historical volatility, Phuoc Hoa Rubber is 1.99 times less risky than Vu Dang. The stock trades about -0.15 of its potential returns per unit of risk. The Vu Dang Investment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 325,000 in Vu Dang Investment on October 30, 2024 and sell it today you would lose (6,000) from holding Vu Dang Investment or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. Vu Dang Investment
Performance |
| Timeline |
| Phuoc Hoa Rubber |
| Vu Dang Investment |
Phuoc Hoa and Vu Dang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phuoc Hoa and Vu Dang
The main advantage of trading using opposite Phuoc Hoa and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang's long position.| Phuoc Hoa vs. Industrial Urban Development | Phuoc Hoa vs. Plastic Additives JSC | Phuoc Hoa vs. Investment and Industrial | Phuoc Hoa vs. An Phat Plastic |
| Vu Dang vs. VTC Telecommunications JSC | Vu Dang vs. Transimex Transportation JSC | Vu Dang vs. Ha Noi Education | Vu Dang vs. Danang Education Investment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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