Correlation Between Hoang Huy and Nam Long

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

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

Diversification Opportunities for Hoang Huy and Nam Long

0.95

Correlation Coefficient

Hoang Huy  Nam Long

Almost no diversification

The 3 months correlation between Hoang and Nam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hoang Huy Investment and Nam Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Long Investment and Hoang Huy 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 Hoang Huy Investment are associated (or correlated) with Nam Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Long Investment has no effect on the direction of Hoang Huy i.e., Hoang Huy and Nam Long go up and down completely randomly.

Pair Corralation between Hoang Huy and Nam Long

Assuming the 90 days trading horizon Hoang Huy Investment is expected to generate 1.2 times more return on investment than Nam Long. However, Hoang Huy is 1.2 times more volatile than Nam Long Investment. It trades about 0.29 of its potential returns per unit of risk. Nam Long Investment is currently generating about 0.25 per unit of risk. If you would invest  1,145,000  in Hoang Huy Investment on May 7, 2025 and sell it today you would earn a total of  645,000  from holding Hoang Huy Investment or generate 56.33% return on investment over 90 days.

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

Hoang Huy Investment  vs.  Nam Long Investment

Hoang Huy Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hoang Huy Investment are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hoang Huy displayed solid returns over the last few months and may actually be approaching a breakup point.

Nam Long Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nam Long Investment are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Nam Long displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hoang Huy and Nam Long

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

The idea behind Hoang Huy Investment and Nam 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..