Correlation Between Hung Hau and Ha Noi
Can any of the company-specific risk be diversified away by investing in both Hung Hau and Ha Noi 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 Ha Noi 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 Ha Noi Education, you can compare the effects of market volatilities on Hung Hau and Ha Noi 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 Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Hau and Ha Noi.
Diversification Opportunities for Hung Hau and Ha Noi
Very good diversification
The 3 months correlation between Hung and EID is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hung Hau Agricultural and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education 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 Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of Hung Hau i.e., Hung Hau and Ha Noi go up and down completely randomly.
Pair Corralation between Hung Hau and Ha Noi
Assuming the 90 days trading horizon Hung Hau is expected to generate 1.78 times less return on investment than Ha Noi. In addition to that, Hung Hau is 2.83 times more volatile than Ha Noi Education. It trades about 0.01 of its total potential returns per unit of risk. Ha Noi Education is currently generating about 0.07 per unit of volatility. If you would invest 1,678,011 in Ha Noi Education on August 27, 2024 and sell it today you would earn a total of 1,021,989 from holding Ha Noi Education or generate 60.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.03% |
| Values | Daily Returns |
Hung Hau Agricultural vs. Ha Noi Education
Performance |
| Timeline |
| Hung Hau Agricultural |
| Ha Noi Education |
Hung Hau and Ha Noi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Hau and Ha Noi
The main advantage of trading using opposite Hung Hau and Ha Noi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Hau position performs unexpectedly, Ha Noi 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 Ha Noi will offset losses from the drop in Ha Noi's long position.| Hung Hau vs. Saigon Viendong Technology | Hung Hau vs. Post and Telecommunications | Hung Hau vs. Foreign Trade Development | Hung Hau vs. VTC Telecommunications JSC |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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