Correlation Between PVI Reinsurance and Hung Hau
Can any of the company-specific risk be diversified away by investing in both PVI Reinsurance and Hung Hau 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 PVI Reinsurance and Hung Hau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVI Reinsurance Corp and Hung Hau Agricultural, you can compare the effects of market volatilities on PVI Reinsurance and Hung Hau 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 PVI Reinsurance with a short position of Hung Hau. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVI Reinsurance and Hung Hau.
Diversification Opportunities for PVI Reinsurance and Hung Hau
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PVI and Hung is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PVI Reinsurance Corp and Hung Hau Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Hau Agricultural and PVI Reinsurance 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 PVI Reinsurance Corp are associated (or correlated) with Hung Hau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Hau Agricultural has no effect on the direction of PVI Reinsurance i.e., PVI Reinsurance and Hung Hau go up and down completely randomly.
Pair Corralation between PVI Reinsurance and Hung Hau
Assuming the 90 days trading horizon PVI Reinsurance Corp is expected to generate 0.29 times more return on investment than Hung Hau. However, PVI Reinsurance Corp is 3.44 times less risky than Hung Hau. It trades about -0.04 of its potential returns per unit of risk. Hung Hau Agricultural is currently generating about -0.01 per unit of risk. If you would invest 1,860,000 in PVI Reinsurance Corp on August 28, 2024 and sell it today you would lose (60,000) from holding PVI Reinsurance Corp or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.79% |
| Values | Daily Returns |
PVI Reinsurance Corp vs. Hung Hau Agricultural
Performance |
| Timeline |
| PVI Reinsurance Corp |
| Hung Hau Agricultural |
PVI Reinsurance and Hung Hau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVI Reinsurance and Hung Hau
The main advantage of trading using opposite PVI Reinsurance and Hung Hau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVI Reinsurance position performs unexpectedly, Hung Hau 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 Hung Hau will offset losses from the drop in Hung Hau's long position.| PVI Reinsurance vs. FIT INVEST JSC | PVI Reinsurance vs. Damsan JSC | PVI Reinsurance vs. An Phat Plastic | PVI Reinsurance vs. APG Securities Joint |
| Hung Hau vs. Da Nang Construction | Hung Hau vs. Song Hong Aluminum | Hung Hau vs. South Books Educational | Hung Hau vs. Development Investment Construction |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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