Correlation Between Post and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Post and Hochiminh City 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 Post and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Hochiminh City Metal, you can compare the effects of market volatilities on Post and Hochiminh City 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 Post with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Hochiminh City.
Diversification Opportunities for Post and Hochiminh City
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Post and Hochiminh is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and Post 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 Post and Telecommunications are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Post i.e., Post and Hochiminh City go up and down completely randomly.
Pair Corralation between Post and Hochiminh City
Assuming the 90 days trading horizon Post and Telecommunications is expected to under-perform the Hochiminh City. In addition to that, Post is 1.56 times more volatile than Hochiminh City Metal. It trades about -0.06 of its total potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.04 per unit of volatility. If you would invest 1,160,000 in Hochiminh City Metal on August 31, 2024 and sell it today you would lose (45,000) from holding Hochiminh City Metal or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post and Telecommunications vs. Hochiminh City Metal
Performance |
| Timeline |
| Post and Telecommuni |
| Hochiminh City Metal |
Post and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and Hochiminh City
The main advantage of trading using opposite Post and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Post vs. MST Investment JSC | Post vs. Din Capital Investment | Post vs. Petrolimex Information Technology | Post vs. Vina2 Investment and |
| Hochiminh City vs. VTC Telecommunications JSC | Hochiminh City vs. DOMESCO Medical Import | Hochiminh City vs. Elcom Technology Communications | Hochiminh City vs. Tri Viet Management |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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