Correlation Between Pha Lai and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Binh Duong 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 Binh Duong 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 Binh Duong Trade, you can compare the effects of market volatilities on Pha Lai and Binh Duong 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 Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Binh Duong.
Diversification Opportunities for Pha Lai and Binh Duong
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pha and Binh is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Pha Lai i.e., Pha Lai and Binh Duong go up and down completely randomly.
Pair Corralation between Pha Lai and Binh Duong
Assuming the 90 days trading horizon Pha Lai Thermal is expected to under-perform the Binh Duong. In addition to that, Pha Lai is 1.52 times more volatile than Binh Duong Trade. It trades about -0.36 of its total potential returns per unit of risk. Binh Duong Trade is currently generating about 0.08 per unit of volatility. If you would invest 1,005,000 in Binh Duong Trade on September 1, 2024 and sell it today you would earn a total of 15,000 from holding Binh Duong Trade or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Lai Thermal vs. Binh Duong Trade
Performance |
| Timeline |
| Pha Lai Thermal |
| Binh Duong Trade |
Pha Lai and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Binh Duong
The main advantage of trading using opposite Pha Lai and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.The idea behind Pha Lai Thermal and Binh Duong Trade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Binh Duong vs. Elcom Technology Communications | Binh Duong vs. Post and Telecommunications | Binh Duong vs. South Basic Chemicals | Binh Duong vs. Saigon Telecommunication Technologies |
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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