Correlation Between Industrial Urban and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Industrial Urban 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 Industrial Urban and Tin Nghia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Urban Development and Tin Nghia Industrial, you can compare the effects of market volatilities on Industrial Urban 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 Industrial Urban with a short position of Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Urban and Tin Nghia.
Diversification Opportunities for Industrial Urban and Tin Nghia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Tin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Urban Development 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 Industrial Urban 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 Industrial Urban Development 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 Industrial Urban i.e., Industrial Urban and Tin Nghia go up and down completely randomly.
Pair Corralation between Industrial Urban and Tin Nghia
Assuming the 90 days trading horizon Industrial Urban Development is expected to generate 1.44 times more return on investment than Tin Nghia. However, Industrial Urban is 1.44 times more volatile than Tin Nghia Industrial. It trades about 0.08 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about 0.01 per unit of risk. If you would invest 2,024,070 in Industrial Urban Development on September 12, 2024 and sell it today you would earn a total of 1,170,930 from holding Industrial Urban Development or generate 57.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Urban Development vs. Tin Nghia Industrial
Performance |
| Timeline |
| Industrial Urban Dev |
| Tin Nghia Industrial |
Industrial Urban and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Urban and Tin Nghia
The main advantage of trading using opposite Industrial Urban and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Urban 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.| Industrial Urban vs. FIT INVEST JSC | Industrial Urban vs. Damsan JSC | Industrial Urban vs. An Phat Plastic | Industrial Urban vs. Alphanam ME |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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