Correlation Between Sai Gon and HUD1 Investment
Can any of the company-specific risk be diversified away by investing in both Sai Gon and HUD1 Investment 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 Sai Gon and HUD1 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sai Gon Ha and HUD1 Investment and, you can compare the effects of market volatilities on Sai Gon and HUD1 Investment 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 Sai Gon with a short position of HUD1 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sai Gon and HUD1 Investment.
Diversification Opportunities for Sai Gon and HUD1 Investment
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sai and HUD1 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sai Gon Ha and HUD1 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUD1 Investment and Sai Gon 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 Sai Gon Ha are associated (or correlated) with HUD1 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUD1 Investment has no effect on the direction of Sai Gon i.e., Sai Gon and HUD1 Investment go up and down completely randomly.
Pair Corralation between Sai Gon and HUD1 Investment
Assuming the 90 days trading horizon Sai Gon Ha is expected to under-perform the HUD1 Investment. In addition to that, Sai Gon is 1.04 times more volatile than HUD1 Investment and. It trades about -0.04 of its total potential returns per unit of risk. HUD1 Investment and is currently generating about 0.01 per unit of volatility. If you would invest 709,872 in HUD1 Investment and on September 3, 2024 and sell it today you would lose (109,872) from holding HUD1 Investment and or give up 15.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.04% |
| Values | Daily Returns |
Sai Gon Ha vs. HUD1 Investment and
Performance |
| Timeline |
| Sai Gon Ha |
| HUD1 Investment |
Sai Gon and HUD1 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sai Gon and HUD1 Investment
The main advantage of trading using opposite Sai Gon and HUD1 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sai Gon position performs unexpectedly, HUD1 Investment 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 HUD1 Investment will offset losses from the drop in HUD1 Investment's long position.The idea behind Sai Gon Ha and HUD1 Investment and 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.| HUD1 Investment vs. RangDong Plastic JSC | HUD1 Investment vs. Materials Petroleum JSC | HUD1 Investment vs. PetroVietnam Transportation Corp | HUD1 Investment 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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