Correlation Between Hung Hau and Song Hong
Can any of the company-specific risk be diversified away by investing in both Hung Hau and Song Hong 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 Song Hong 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 Song Hong Garment, you can compare the effects of market volatilities on Hung Hau and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Hau and Song Hong.
Diversification Opportunities for Hung Hau and Song Hong
Very good diversification
The 3 months correlation between Hung and Song is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hung Hau Agricultural and Song Hong Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Garment 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Garment has no effect on the direction of Hung Hau i.e., Hung Hau and Song Hong go up and down completely randomly.
Pair Corralation between Hung Hau and Song Hong
Assuming the 90 days trading horizon Hung Hau Agricultural is expected to under-perform the Song Hong. In addition to that, Hung Hau is 2.0 times more volatile than Song Hong Garment. It trades about -0.02 of its total potential returns per unit of risk. Song Hong Garment is currently generating about 0.28 per unit of volatility. If you would invest 4,266,490 in Song Hong Garment on September 3, 2024 and sell it today you would earn a total of 653,510 from holding Song Hong Garment or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.47% |
| Values | Daily Returns |
Hung Hau Agricultural vs. Song Hong Garment
Performance |
| Timeline |
| Hung Hau Agricultural |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Song Hong Garment |
Hung Hau and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Hau and Song Hong
The main advantage of trading using opposite Hung Hau and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Hau position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Hung Hau vs. Petrolimex Information Technology | Hung Hau vs. Nafoods Group JSC | Hung Hau vs. Sea Air Freight | Hung Hau vs. Innovative Technology Development |
| Song Hong vs. Vina2 Investment and | Song Hong vs. An Phat Plastic | Song Hong vs. Hanoi Plastics JSC | Song Hong vs. Nafoods Group JSC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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