Correlation Between Phuoc Hoa and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and Tin Nghia 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 Tin Nghia 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 Tin Nghia Industrial, you can compare the effects of market volatilities on Phuoc Hoa and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Tin Nghia.
Diversification Opportunities for Phuoc Hoa and Tin Nghia
Poor diversification
The 3 months correlation between Phuoc and Tin is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Tin Nghia go up and down completely randomly.
Pair Corralation between Phuoc Hoa and Tin Nghia
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to generate 0.85 times more return on investment than Tin Nghia. However, Phuoc Hoa Rubber is 1.18 times less risky than Tin Nghia. It trades about -0.01 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.13 per unit of risk. If you would invest 5,620,000 in Phuoc Hoa Rubber on August 24, 2024 and sell it today you would lose (30,000) from holding Phuoc Hoa Rubber or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. Tin Nghia Industrial
Performance |
| Timeline |
| Phuoc Hoa Rubber |
| Tin Nghia Industrial |
Phuoc Hoa and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phuoc Hoa and Tin Nghia
The main advantage of trading using opposite Phuoc Hoa and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia'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 |
| Tin Nghia vs. FIT INVEST JSC | Tin Nghia vs. Damsan JSC | Tin Nghia vs. An Phat Plastic | Tin Nghia vs. APG Securities Joint |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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