Correlation Between Pha Lai and Ha Noi
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Ha Noi 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 Lai and Ha Noi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Lai Thermal and Ha Noi Education, you can compare the effects of market volatilities on Pha Lai and Ha Noi 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 Lai with a short position of Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Ha Noi.
Diversification Opportunities for Pha Lai and Ha Noi
Poor diversification
The 3 months correlation between Pha and EID is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education and Pha Lai 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 Lai Thermal are associated (or correlated) with Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of Pha Lai i.e., Pha Lai and Ha Noi go up and down completely randomly.
Pair Corralation between Pha Lai and Ha Noi
Assuming the 90 days trading horizon Pha Lai Thermal is expected to generate 1.04 times more return on investment than Ha Noi. However, Pha Lai is 1.04 times more volatile than Ha Noi Education. It trades about 0.18 of its potential returns per unit of risk. Ha Noi Education is currently generating about 0.15 per unit of risk. If you would invest 1,135,000 in Pha Lai Thermal on November 28, 2024 and sell it today you would earn a total of 40,000 from holding Pha Lai Thermal or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Lai Thermal vs. Ha Noi Education
Performance |
| Timeline |
| Pha Lai Thermal |
| Ha Noi Education |
Pha Lai and Ha Noi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Ha Noi
The main advantage of trading using opposite Pha Lai and Ha Noi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Ha Noi 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 Ha Noi will offset losses from the drop in Ha Noi's long position.| Pha Lai vs. Innovative Technology Development | Pha Lai vs. Transport and Industry | Pha Lai vs. Petrovietnam Technical Services | Pha Lai vs. Saigon Telecommunication Technologies |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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