Correlation Between Phuoc Hoa and Tng Investment
Can any of the company-specific risk be diversified away by investing in both Phuoc Hoa and Tng Investment 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 Tng Investment 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 Tng Investment And, you can compare the effects of market volatilities on Phuoc Hoa and Tng Investment 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 Tng Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Tng Investment.
Diversification Opportunities for Phuoc Hoa and Tng Investment
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phuoc and Tng is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And 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 Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Tng Investment go up and down completely randomly.
Pair Corralation between Phuoc Hoa and Tng Investment
Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to generate 0.96 times more return on investment than Tng Investment. However, Phuoc Hoa Rubber is 1.04 times less risky than Tng Investment. It trades about -0.05 of its potential returns per unit of risk. Tng Investment And is currently generating about -0.11 per unit of risk. If you would invest 5,280,000 in Phuoc Hoa Rubber on October 30, 2024 and sell it today you would lose (80,000) from holding Phuoc Hoa Rubber or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phuoc Hoa Rubber vs. Tng Investment And
Performance |
| Timeline |
| Phuoc Hoa Rubber |
| Tng Investment And |
Phuoc Hoa and Tng Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phuoc Hoa and Tng Investment
The main advantage of trading using opposite Phuoc Hoa and Tng Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phuoc Hoa position performs unexpectedly, Tng Investment 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 Tng Investment will offset losses from the drop in Tng Investment'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 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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