Correlation Between Pha Le and Travel Investment
Can any of the company-specific risk be diversified away by investing in both Pha Le and Travel 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 Pha Le and Travel Investment 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 Travel Investment and, you can compare the effects of market volatilities on Pha Le and Travel 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 Pha Le with a short position of Travel Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Travel Investment.
Diversification Opportunities for Pha Le and Travel Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pha and Travel is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Travel Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Investment 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 Travel Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Investment has no effect on the direction of Pha Le i.e., Pha Le and Travel Investment go up and down completely randomly.
Pair Corralation between Pha Le and Travel Investment
Assuming the 90 days trading horizon Pha Le Plastics is expected to under-perform the Travel Investment. But the stock apears to be less risky and, when comparing its historical volatility, Pha Le Plastics is 3.39 times less risky than Travel Investment. The stock trades about -0.02 of its potential returns per unit of risk. The Travel Investment and is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 732,000 in Travel Investment and on November 28, 2024 and sell it today you would earn a total of 1,000.00 from holding Travel Investment and or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.71% |
| Values | Daily Returns |
Pha Le Plastics vs. Travel Investment and
Performance |
| Timeline |
| Pha Le Plastics |
| Travel Investment |
Pha Le and Travel Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Travel Investment
The main advantage of trading using opposite Pha Le and Travel Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Travel 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 Travel Investment will offset losses from the drop in Travel Investment'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 |
| Travel Investment vs. PV2 Investment JSC | Travel Investment vs. BIDV Insurance Corp | Travel Investment vs. Danang Education Investment | Travel Investment 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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