Correlation Between IDJ FINANCIAL and Ha Noi

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

By analyzing existing cross correlation between IDJ FINANCIAL and Ha Noi Education, you can compare the effects of market volatilities on IDJ FINANCIAL and Ha Noi 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 IDJ FINANCIAL with a short position of Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and Ha Noi.

Diversification Opportunities for IDJ FINANCIAL and Ha Noi

0.33

Correlation Coefficient

IDJ FINANCIAL  Ha Noi

Weak diversification

The 3 months correlation between IDJ and EID is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and Ha Noi go up and down completely randomly.

Pair Corralation between IDJ FINANCIAL and Ha Noi

Assuming the 90 days trading horizon IDJ FINANCIAL is expected to generate 2.05 times more return on investment than Ha Noi. However, IDJ FINANCIAL is 2.05 times more volatile than Ha Noi Education. It trades about 0.05 of its potential returns per unit of risk. Ha Noi Education is currently generating about -0.14 per unit of risk. If you would invest  590,000  in IDJ FINANCIAL on September 21, 2024 and sell it today you would earn a total of  10,000  from holding IDJ FINANCIAL or generate 1.69% return on investment over 90 days.

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

IDJ FINANCIAL  vs.  Ha Noi Education

IDJ FINANCIAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IDJ FINANCIAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward-looking indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Ha Noi Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ha Noi Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with IDJ FINANCIAL and Ha Noi

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

The idea behind IDJ FINANCIAL and Ha Noi Education 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.