Correlation Between HNX and Mobile World

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

By analyzing existing cross correlation between HNX and Mobile World Investment, you can compare the effects of market volatilities on HNX and Mobile World 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 HNX with a short position of Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNX and Mobile World.

Diversification Opportunities for HNX and Mobile World

0.52

Correlation Coefficient

HNX  Mobile World

Very weak diversification

The 3 months correlation between HNX and Mobile is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HNX and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World Investment and HNX 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 HNX are associated (or correlated) with Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of HNX i.e., HNX and Mobile World go up and down completely randomly.

Pair Corralation between HNX and Mobile World

Assuming the 90 days trading horizon HNX is expected to generate 0.49 times more return on investment than Mobile World. However, HNX is 2.04 times less risky than Mobile World. It trades about -0.28 of its potential returns per unit of risk. Mobile World Investment is currently generating about -0.22 per unit of risk. If you would invest  22,851  in HNX on October 24, 2024 and sell it today you would lose (784.00) from holding HNX or give up 3.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

HNX  vs.  Mobile World Investment

Pair Trading with HNX and Mobile World

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

The idea behind HNX and Mobile World Investment 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.