Correlation Between Pha Le and Vietnam JSCmmercial
Can any of the company-specific risk be diversified away by investing in both Pha Le and Vietnam JSCmmercial 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 Pha Le and Vietnam JSCmmercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Le Plastics and Vietnam JSCmmercial Bank, you can compare the effects of market volatilities on Pha Le and Vietnam JSCmmercial 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 Pha Le with a short position of Vietnam JSCmmercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Vietnam JSCmmercial.
Diversification Opportunities for Pha Le and Vietnam JSCmmercial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pha and Vietnam is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Vietnam JSCmmercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam JSCmmercial Bank and Pha Le 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 Pha Le Plastics are associated (or correlated) with Vietnam JSCmmercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam JSCmmercial Bank has no effect on the direction of Pha Le i.e., Pha Le and Vietnam JSCmmercial go up and down completely randomly.
Pair Corralation between Pha Le and Vietnam JSCmmercial
Assuming the 90 days trading horizon Pha Le Plastics is expected to under-perform the Vietnam JSCmmercial. But the stock apears to be less risky and, when comparing its historical volatility, Pha Le Plastics is 2.12 times less risky than Vietnam JSCmmercial. The stock trades about -0.02 of its potential returns per unit of risk. The Vietnam JSCmmercial Bank is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,805,000 in Vietnam JSCmmercial Bank on November 28, 2024 and sell it today you would earn a total of 330,000 from holding Vietnam JSCmmercial Bank or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Pha Le Plastics vs. Vietnam JSCmmercial Bank
Performance |
| Timeline |
| Pha Le Plastics |
| Vietnam JSCmmercial Bank |
Pha Le and Vietnam JSCmmercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Vietnam JSCmmercial
The main advantage of trading using opposite Pha Le and Vietnam JSCmmercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Vietnam JSCmmercial 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 Vietnam JSCmmercial will offset losses from the drop in Vietnam JSCmmercial's long position.| Pha Le vs. Petrolimex Information Technology | Pha Le vs. BIDV Insurance Corp | Pha Le vs. Saigon Viendong Technology | Pha Le vs. Petrolimex Insurance Corp |
| Vietnam JSCmmercial vs. Vietnam Construction JSC | Vietnam JSCmmercial vs. Construction JSC No5 | Vietnam JSCmmercial vs. Vnsteel Vicasa JSC | Vietnam JSCmmercial vs. Pacific Petroleum Transportation |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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