Correlation Between Vu Dang and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Vu Dang and Hanoi Plastics 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 Vu Dang and Hanoi Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vu Dang Investment and Hanoi Plastics JSC, you can compare the effects of market volatilities on Vu Dang and Hanoi Plastics 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 Vu Dang with a short position of Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Hanoi Plastics.
Diversification Opportunities for Vu Dang and Hanoi Plastics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SVD and Hanoi is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Hanoi Plastics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Plastics JSC and Vu Dang 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 Vu Dang Investment are associated (or correlated) with Hanoi Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Plastics JSC has no effect on the direction of Vu Dang i.e., Vu Dang and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Vu Dang and Hanoi Plastics
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 1.11 times more return on investment than Hanoi Plastics. However, Vu Dang is 1.11 times more volatile than Hanoi Plastics JSC. It trades about 0.02 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about 0.01 per unit of risk. If you would invest 320,000 in Vu Dang Investment on September 3, 2024 and sell it today you would earn a total of 11,000 from holding Vu Dang Investment or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vu Dang Investment vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Vu Dang Investment |
| Hanoi Plastics JSC |
Vu Dang and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Hanoi Plastics
The main advantage of trading using opposite Vu Dang and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, Hanoi Plastics 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 Hanoi Plastics will offset losses from the drop in Hanoi Plastics' long position.| Vu Dang vs. Post and Telecommunications | Vu Dang vs. VTC Telecommunications JSC | Vu Dang vs. Elcom Technology Communications | Vu Dang vs. Pacific Petroleum Transportation |
| Hanoi Plastics vs. Vu Dang Investment | Hanoi Plastics vs. Petrolimex International Trading | Hanoi Plastics vs. HUD1 Investment and | Hanoi Plastics vs. Vina2 Investment and |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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