Correlation Between Dong A and TDT Investment
Can any of the company-specific risk be diversified away by investing in both Dong A and TDT Investment 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 Dong A and TDT Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Hotel and TDT Investment and, you can compare the effects of market volatilities on Dong A and TDT Investment 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 Dong A with a short position of TDT Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and TDT Investment.
Diversification Opportunities for Dong A and TDT Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dong and TDT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Hotel and TDT Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDT Investment and Dong A 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 Dong A Hotel are associated (or correlated) with TDT Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDT Investment has no effect on the direction of Dong A i.e., Dong A and TDT Investment go up and down completely randomly.
Pair Corralation between Dong A and TDT Investment
Assuming the 90 days trading horizon Dong A Hotel is expected to generate 1.92 times more return on investment than TDT Investment. However, Dong A is 1.92 times more volatile than TDT Investment and. It trades about 0.11 of its potential returns per unit of risk. TDT Investment and is currently generating about 0.13 per unit of risk. If you would invest 342,000 in Dong A Hotel on November 8, 2024 and sell it today you would earn a total of 16,000 from holding Dong A Hotel or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Dong A Hotel vs. TDT Investment and
Performance |
| Timeline |
| Dong A Hotel |
| TDT Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Dong A and TDT Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and TDT Investment
The main advantage of trading using opposite Dong A and TDT Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, TDT Investment 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 TDT Investment will offset losses from the drop in TDT Investment's long position.| Dong A vs. Bao Ngoc Investment | Dong A vs. Hcd Investment Producing | Dong A vs. Vincom Retail JSC | Dong A vs. FPT Digital Retail |
| TDT Investment vs. Ben Thanh Rubber | TDT Investment vs. Transport and Industry | TDT Investment vs. Innovative Technology Development | TDT Investment vs. Mobile World Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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