Correlation Between LDG Investment and Ha Long

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

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

Diversification Opportunities for LDG Investment and Ha Long

0.79

Correlation Coefficient

LDG Investment  Ha Long

Poor diversification

The 3 months correlation between LDG and HID is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Ha Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Long Investment and LDG Investment 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 LDG Investment JSC are associated (or correlated) with Ha Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Long Investment has no effect on the direction of LDG Investment i.e., LDG Investment and Ha Long go up and down completely randomly.

Pair Corralation between LDG Investment and Ha Long

Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Ha Long. In addition to that, LDG Investment is 1.46 times more volatile than Ha Long Investment. It trades about -0.04 of its total potential returns per unit of risk. Ha Long Investment is currently generating about -0.01 per unit of volatility. If you would invest  308,000  in Ha Long Investment on September 30, 2024 and sell it today you would lose (42,000) from holding Ha Long Investment or give up 13.64% of portfolio value over 90 days.

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

LDG Investment JSC  vs.  Ha Long Investment

LDG Investment JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ha Long Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ha Long Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Ha Long is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with LDG Investment and Ha Long

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

The idea behind LDG Investment JSC and Ha Long 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.