Correlation Between CMC Investment and Hai Phong

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

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

Diversification Opportunities for CMC Investment and Hai Phong

0.0

Correlation Coefficient

CMC Investment  Hai Phong

Pay attention - limited upside

The 3 months correlation between CMC and Hai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMC Investment JSC and Hai Phong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai Phong Thermal and CMC 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 CMC Investment JSC are associated (or correlated) with Hai Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai Phong Thermal has no effect on the direction of CMC Investment i.e., CMC Investment and Hai Phong go up and down completely randomly.

Pair Corralation between CMC Investment and Hai Phong

If you would invest  550,000  in CMC Investment JSC on September 29, 2024 and sell it today you would earn a total of  30,000  from holding CMC Investment JSC or generate 5.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CMC Investment JSC  vs.  Hai Phong Thermal

CMC Investment JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CMC Investment JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hai Phong Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hai Phong Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hai Phong is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CMC Investment and Hai Phong

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

The idea behind CMC Investment JSC and Hai Phong Thermal 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.