Correlation Between Phuoc Hoa and Telecoms Informatics

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

By analyzing existing cross correlation between Phuoc Hoa Rubber and Telecoms Informatics JSC, you can compare the effects of market volatilities on Phuoc Hoa and Telecoms Informatics 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 Phuoc Hoa with a short position of Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phuoc Hoa and Telecoms Informatics.

Diversification Opportunities for Phuoc Hoa and Telecoms Informatics

-0.45

Correlation Coefficient

Phuoc Hoa  Telecoms Informatics

Very good diversification

The 3 months correlation between Phuoc and Telecoms is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Phuoc Hoa Rubber and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC and Phuoc Hoa 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 Phuoc Hoa Rubber are associated (or correlated) with Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Phuoc Hoa i.e., Phuoc Hoa and Telecoms Informatics go up and down completely randomly.

Pair Corralation between Phuoc Hoa and Telecoms Informatics

Assuming the 90 days trading horizon Phuoc Hoa Rubber is expected to under-perform the Telecoms Informatics. But the stock apears to be less risky and, when comparing its historical volatility, Phuoc Hoa Rubber is 1.7 times less risky than Telecoms Informatics. The stock trades about -0.03 of its potential returns per unit of risk. The Telecoms Informatics JSC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,195,000  in Telecoms Informatics JSC on September 18, 2024 and sell it today you would earn a total of  35,000  from holding Telecoms Informatics JSC or generate 2.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Phuoc Hoa Rubber  vs.  Telecoms Informatics JSC

Phuoc Hoa Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

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

Telecoms Informatics JSC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telecoms Informatics JSC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Telecoms Informatics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Phuoc Hoa and Telecoms Informatics

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

The idea behind Phuoc Hoa Rubber and Telecoms Informatics JSC 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.