Correlation Between Investment and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Investment and Tin Nghia 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 Investment and Tin Nghia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment and Industrial and Tin Nghia Industrial, you can compare the effects of market volatilities on Investment and Tin Nghia 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 Investment with a short position of Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Tin Nghia.
Diversification Opportunities for Investment and Tin Nghia
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investment and Tin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial and 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 Investment and Industrial are associated (or correlated) with Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Investment i.e., Investment and Tin Nghia go up and down completely randomly.
Pair Corralation between Investment and Tin Nghia
Assuming the 90 days trading horizon Investment and Industrial is expected to under-perform the Tin Nghia. But the stock apears to be less risky and, when comparing its historical volatility, Investment and Industrial is 1.36 times less risky than Tin Nghia. The stock trades about -0.01 of its potential returns per unit of risk. The Tin Nghia Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,554,755 in Tin Nghia Industrial on September 12, 2024 and sell it today you would earn a total of 735,245 from holding Tin Nghia Industrial or generate 47.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment and Industrial vs. Tin Nghia Industrial
Performance |
| Timeline |
| Investment and Industrial |
| Tin Nghia Industrial |
Investment and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Tin Nghia
The main advantage of trading using opposite Investment and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Investment vs. BIDV Insurance Corp | Investment vs. Vnsteel Vicasa JSC | Investment vs. Vina2 Investment and | Investment vs. HUD1 Investment and |
| Tin Nghia vs. POST TELECOMMU | Tin Nghia vs. Construction And Investment | Tin Nghia vs. Dinhvu Port Investment | Tin Nghia vs. Petrolimex Information Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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