Correlation Between Hochiminh City and CEO Group

Can any of the company-specific risk be diversified away by investing in both Hochiminh City and CEO Group 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 CEO Group 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 CEO Group JSC, you can compare the effects of market volatilities on Hochiminh City and CEO Group 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 CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and CEO Group.

Diversification Opportunities for Hochiminh City and CEO Group

0.6

Correlation Coefficient

Hochiminh City  CEO Group

Poor diversification

The 3 months correlation between Hochiminh and CEO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC 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 CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Hochiminh City i.e., Hochiminh City and CEO Group go up and down completely randomly.

Pair Corralation between Hochiminh City and CEO Group

Assuming the 90 days trading horizon Hochiminh City is expected to generate 1.1 times less return on investment than CEO Group. In addition to that, Hochiminh City is 1.14 times more volatile than CEO Group JSC. It trades about 0.07 of its total potential returns per unit of risk. CEO Group JSC is currently generating about 0.09 per unit of volatility. If you would invest  1,370,000  in CEO Group JSC on December 22, 2024 and sell it today you would earn a total of  140,000  from holding CEO Group JSC or generate 10.22% return on investment over 90 days.

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

Hochiminh City Metal  vs.  CEO Group JSC

Hochiminh City Metal

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hochiminh City Metal are ranked lower than 5 (%) 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 April 2025.

CEO Group JSC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEO Group JSC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CEO Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hochiminh City and CEO Group

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

The idea behind Hochiminh City Metal and CEO Group JSC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.