Correlation Between Hochiminh City and APG Securities

Can any of the company-specific risk be diversified away by investing in both Hochiminh City and APG Securities 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 Hochiminh City and APG Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hochiminh City Metal and APG Securities Joint, you can compare the effects of market volatilities on Hochiminh City and APG Securities 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 Hochiminh City with a short position of APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and APG Securities.

Diversification Opportunities for Hochiminh City and APG Securities

-0.76

Correlation Coefficient

Hochiminh City  APG Securities

Pay attention - limited upside

The 3 months correlation between Hochiminh and APG is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint and Hochiminh City 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 Hochiminh City Metal are associated (or correlated) with APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of Hochiminh City i.e., Hochiminh City and APG Securities go up and down completely randomly.

Pair Corralation between Hochiminh City and APG Securities

Assuming the 90 days trading horizon Hochiminh City is expected to generate 1.41 times less return on investment than APG Securities. But when comparing it to its historical volatility, Hochiminh City Metal is 1.72 times less risky than APG Securities. It trades about 0.03 of its potential returns per unit of risk. APG Securities Joint is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  608,000  in APG Securities Joint on October 14, 2024 and sell it today you would earn a total of  106,000  from holding APG Securities Joint or generate 17.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hochiminh City Metal  vs.  APG Securities Joint

Hochiminh City Metal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hochiminh City Metal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Hochiminh City may actually be approaching a critical reversion point that can send shares even higher in February 2025.

APG Securities Joint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APG Securities Joint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hochiminh City and APG Securities

The main advantage of trading using opposite Hochiminh City and APG Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, APG Securities 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 APG Securities will offset losses from the drop in APG Securities' long position.

The idea behind Hochiminh City Metal and APG Securities Joint pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.