Correlation Between Ngan Son and Post

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

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

Diversification Opportunities for Ngan Son and Post

0.19

Correlation Coefficient

Ngan Son  Post

Average diversification

The 3 months correlation between Ngan and Post is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ngan Son JSC and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and Ngan Son 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 Ngan Son JSC are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Ngan Son i.e., Ngan Son and Post go up and down completely randomly.

Pair Corralation between Ngan Son and Post

Assuming the 90 days trading horizon Ngan Son JSC is expected to generate 1.19 times more return on investment than Post. However, Ngan Son is 1.19 times more volatile than Post and Telecommunications. It trades about 0.08 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.0 per unit of risk. If you would invest  544,017  in Ngan Son JSC on October 24, 2024 and sell it today you would earn a total of  505,983  from holding Ngan Son JSC or generate 93.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.77%
Values	Daily Returns

Ngan Son JSC  vs.  Post and Telecommunications

Ngan Son JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Post and Telecommuni

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ngan Son and Post

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

The idea behind Ngan Son JSC and Post and Telecommunications 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.