Correlation Between VietinBank Securities and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both VietinBank Securities and Tienlen Steel 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 VietinBank Securities and Tienlen Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VietinBank Securities JSC and Tienlen Steel Corp, you can compare the effects of market volatilities on VietinBank Securities and Tienlen Steel 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 VietinBank Securities with a short position of Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of VietinBank Securities and Tienlen Steel.
Diversification Opportunities for VietinBank Securities and Tienlen Steel
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VietinBank and Tienlen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp and VietinBank Securities 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 VietinBank Securities JSC are associated (or correlated) with Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of VietinBank Securities i.e., VietinBank Securities and Tienlen Steel go up and down completely randomly.
Pair Corralation between VietinBank Securities and Tienlen Steel
Assuming the 90 days trading horizon VietinBank Securities JSC is expected to generate 1.12 times more return on investment than Tienlen Steel. However, VietinBank Securities is 1.12 times more volatile than Tienlen Steel Corp. It trades about -0.18 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.24 per unit of risk. If you would invest 3,535,000 in VietinBank Securities JSC on November 3, 2024 and sell it today you would lose (175,000) from holding VietinBank Securities JSC or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VietinBank Securities JSC vs. Tienlen Steel Corp
Performance |
| Timeline |
| VietinBank Securities JSC |
| Tienlen Steel Corp |
VietinBank Securities and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VietinBank Securities and Tienlen Steel
The main advantage of trading using opposite VietinBank Securities and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VietinBank Securities position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| VietinBank Securities vs. Sea Air Freight | VietinBank Securities vs. IDJ FINANCIAL | VietinBank Securities vs. Military Insurance Corp | VietinBank Securities vs. DOMESCO Medical Import |
| Tienlen Steel vs. Hanoi Beer Alcohol | Tienlen Steel vs. Techcom Vietnam REIT | Tienlen Steel vs. Saigon Viendong Technology | Tienlen Steel vs. Hochiminh City Metal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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