Correlation Between Sao Vang and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both Sao Vang and Phuoc Hoa 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 Sao Vang and Phuoc Hoa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Vang Rubber and Phuoc Hoa Rubber, you can compare the effects of market volatilities on Sao Vang and Phuoc Hoa 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 Sao Vang with a short position of Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Vang and Phuoc Hoa.
Diversification Opportunities for Sao Vang and Phuoc Hoa
Very weak diversification
The 3 months correlation between Sao and Phuoc is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sao Vang Rubber and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber and Sao Vang 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 Sao Vang Rubber are associated (or correlated) with Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of Sao Vang i.e., Sao Vang and Phuoc Hoa go up and down completely randomly.
Pair Corralation between Sao Vang and Phuoc Hoa
Assuming the 90 days trading horizon Sao Vang Rubber is expected to generate 1.99 times more return on investment than Phuoc Hoa. However, Sao Vang is 1.99 times more volatile than Phuoc Hoa Rubber. It trades about 0.05 of its potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about 0.05 per unit of risk. If you would invest 1,666,366 in Sao Vang Rubber on September 3, 2024 and sell it today you would earn a total of 903,634 from holding Sao Vang Rubber or generate 54.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.81% |
| Values | Daily Returns |
Sao Vang Rubber vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| Sao Vang Rubber |
| Phuoc Hoa Rubber |
Sao Vang and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Vang and Phuoc Hoa
The main advantage of trading using opposite Sao Vang and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Vang position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa's long position.| Sao Vang vs. FIT INVEST JSC | Sao Vang vs. Damsan JSC | Sao Vang vs. An Phat Plastic | Sao Vang vs. Alphanam ME |
| Phuoc Hoa vs. Materials Petroleum JSC | Phuoc Hoa vs. Hanoi Plastics JSC | Phuoc Hoa vs. Elcom Technology Communications | Phuoc Hoa vs. DIC Holdings Construction |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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