Correlation Between Transimex Saigon and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Transimex Saigon 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 Transimex Saigon and Hanoi Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transimex Saigon Corp and Hanoi Plastics JSC, you can compare the effects of market volatilities on Transimex Saigon 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 Transimex Saigon with a short position of Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transimex Saigon and Hanoi Plastics.
Diversification Opportunities for Transimex Saigon and Hanoi Plastics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transimex and Hanoi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Transimex Saigon Corp 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 Transimex Saigon 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 Transimex Saigon Corp 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 Transimex Saigon i.e., Transimex Saigon and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Transimex Saigon and Hanoi Plastics
Assuming the 90 days trading horizon Transimex Saigon Corp is expected to generate 2.02 times more return on investment than Hanoi Plastics. However, Transimex Saigon is 2.02 times more volatile than Hanoi Plastics JSC. It trades about 0.06 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about -0.15 per unit of risk. If you would invest 4,130,000 in Transimex Saigon Corp on October 11, 2024 and sell it today you would earn a total of 70,000 from holding Transimex Saigon Corp or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Transimex Saigon Corp vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Transimex Saigon Corp |
| Hanoi Plastics JSC |
Transimex Saigon and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transimex Saigon and Hanoi Plastics
The main advantage of trading using opposite Transimex Saigon and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transimex Saigon 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.| Transimex Saigon vs. Hanoi Plastics JSC | Transimex Saigon vs. Transport and Industry | Transimex Saigon vs. Dong Nai Plastic | Transimex Saigon vs. Sao Vang Rubber |
| Hanoi Plastics vs. Vu Dang Investment | Hanoi Plastics vs. PV2 Investment JSC | Hanoi Plastics vs. Development Investment Construction | Hanoi Plastics vs. Dinhvu Port Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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