Correlation Between Pha Le and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Pha Le and Thanh Dat 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 Thanh Dat 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 Thanh Dat Investment, you can compare the effects of market volatilities on Pha Le and Thanh Dat 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 Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Thanh Dat.
Diversification Opportunities for Pha Le and Thanh Dat
Excellent diversification
The 3 months correlation between Pha and Thanh is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat 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 Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Pha Le i.e., Pha Le and Thanh Dat go up and down completely randomly.
Pair Corralation between Pha Le and Thanh Dat
Assuming the 90 days trading horizon Pha Le Plastics is expected to generate 0.97 times more return on investment than Thanh Dat. However, Pha Le Plastics is 1.03 times less risky than Thanh Dat. It trades about 0.01 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about -0.2 per unit of risk. If you would invest 500,000 in Pha Le Plastics on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Pha Le Plastics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Le Plastics vs. Thanh Dat Investment
Performance |
| Timeline |
| Pha Le Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Thanh Dat Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pha Le and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Thanh Dat
The main advantage of trading using opposite Pha Le and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.| Pha Le vs. Transport and Industry | Pha Le vs. Hai An Transport | Pha Le vs. Vietnam JSCmmercial Bank | Pha Le vs. Elcom Technology Communications |
| Thanh Dat vs. Binhthuan Agriculture Services | Thanh Dat vs. Hai An Transport | Thanh Dat vs. Elcom Technology Communications | Thanh Dat vs. Innovative Technology Development |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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