Correlation Between Hung Hau and Central Hydropower
Can any of the company-specific risk be diversified away by investing in both Hung Hau and Central Hydropower 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 Hung Hau and Central Hydropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Hau Agricultural and Central Hydropower JSC, you can compare the effects of market volatilities on Hung Hau and Central Hydropower 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 Hung Hau with a short position of Central Hydropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Hau and Central Hydropower.
Diversification Opportunities for Hung Hau and Central Hydropower
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hung and Central is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hung Hau Agricultural and Central Hydropower JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Hydropower JSC and Hung Hau 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 Hung Hau Agricultural are associated (or correlated) with Central Hydropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Hydropower JSC has no effect on the direction of Hung Hau i.e., Hung Hau and Central Hydropower go up and down completely randomly.
Pair Corralation between Hung Hau and Central Hydropower
Assuming the 90 days trading horizon Hung Hau Agricultural is expected to generate 2.2 times more return on investment than Central Hydropower. However, Hung Hau is 2.2 times more volatile than Central Hydropower JSC. It trades about 0.13 of its potential returns per unit of risk. Central Hydropower JSC is currently generating about 0.13 per unit of risk. If you would invest 1,040,000 in Hung Hau Agricultural on November 28, 2024 and sell it today you would earn a total of 60,000 from holding Hung Hau Agricultural or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.33% |
| Values | Daily Returns |
Hung Hau Agricultural vs. Central Hydropower JSC
Performance |
| Timeline |
| Hung Hau Agricultural |
| Central Hydropower JSC |
Hung Hau and Central Hydropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Hau and Central Hydropower
The main advantage of trading using opposite Hung Hau and Central Hydropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Hau position performs unexpectedly, Central Hydropower 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 Central Hydropower will offset losses from the drop in Central Hydropower's long position.| Hung Hau vs. Petrolimex Petrochemical JSC | Hung Hau vs. Binh Duong Construction | Hung Hau vs. Vinhomes JSC | Hung Hau 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |