Correlation Between Pha Le and Thu Duc
Can any of the company-specific risk be diversified away by investing in both Pha Le and Thu Duc 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 Thu Duc 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 Thu Duc TradingImport, you can compare the effects of market volatilities on Pha Le and Thu Duc 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 Thu Duc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Thu Duc.
Diversification Opportunities for Pha Le and Thu Duc
Good diversification
The 3 months correlation between Pha and Thu is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Thu Duc TradingImport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thu Duc TradingImport 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 Thu Duc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thu Duc TradingImport has no effect on the direction of Pha Le i.e., Pha Le and Thu Duc go up and down completely randomly.
Pair Corralation between Pha Le and Thu Duc
Assuming the 90 days trading horizon Pha Le Plastics is expected to generate 0.68 times more return on investment than Thu Duc. However, Pha Le Plastics is 1.47 times less risky than Thu Duc. It trades about 0.01 of its potential returns per unit of risk. Thu Duc TradingImport is currently generating about -0.27 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 | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Pha Le Plastics vs. Thu Duc TradingImport
Performance |
| Timeline |
| Pha Le Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Thu Duc TradingImport |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Pha Le and Thu Duc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Thu Duc
The main advantage of trading using opposite Pha Le and Thu Duc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Thu Duc 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 Thu Duc will offset losses from the drop in Thu Duc'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 |
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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