Correlation Between Viet Thanh and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Viet Thanh 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 Viet Thanh and Hanoi Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Hanoi Plastics JSC, you can compare the effects of market volatilities on Viet Thanh 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 Viet Thanh with a short position of Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Hanoi Plastics.
Diversification Opportunities for Viet Thanh and Hanoi Plastics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viet and Hanoi is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic 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 Viet Thanh 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 Viet Thanh Plastic 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 Viet Thanh i.e., Viet Thanh and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Viet Thanh and Hanoi Plastics
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to generate 1.37 times more return on investment than Hanoi Plastics. However, Viet Thanh is 1.37 times more volatile than Hanoi Plastics JSC. It trades about 0.15 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about -0.07 per unit of risk. If you would invest 810,000 in Viet Thanh Plastic on November 8, 2024 and sell it today you would earn a total of 960,000 from holding Viet Thanh Plastic or generate 118.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Viet Thanh Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Hanoi Plastics JSC |
Viet Thanh and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Hanoi Plastics
The main advantage of trading using opposite Viet Thanh and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh 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.| Viet Thanh vs. Phuoc Hoa Rubber | Viet Thanh vs. HVC Investment and | Viet Thanh vs. Pha Le Plastics | Viet Thanh vs. An Phat Plastic |
| Hanoi Plastics vs. Binh Minh Plastics | Hanoi Plastics vs. Vnsteel Vicasa JSC | Hanoi Plastics vs. International Development Investment | Hanoi Plastics vs. Pha Le Plastics |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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