Correlation Between Danang Rubber and Tien Phong
Can any of the company-specific risk be diversified away by investing in both Danang Rubber and Tien Phong 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 Danang Rubber and Tien Phong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danang Rubber JSC and Tien Phong Plastic, you can compare the effects of market volatilities on Danang Rubber and Tien Phong 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 Danang Rubber with a short position of Tien Phong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danang Rubber and Tien Phong.
Diversification Opportunities for Danang Rubber and Tien Phong
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Danang and Tien is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Danang Rubber JSC and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic and Danang Rubber 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 Danang Rubber JSC are associated (or correlated) with Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Danang Rubber i.e., Danang Rubber and Tien Phong go up and down completely randomly.
Pair Corralation between Danang Rubber and Tien Phong
Assuming the 90 days trading horizon Danang Rubber is expected to generate 2.46 times less return on investment than Tien Phong. But when comparing it to its historical volatility, Danang Rubber JSC is 1.31 times less risky than Tien Phong. It trades about 0.05 of its potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,333,339 in Tien Phong Plastic on September 2, 2024 and sell it today you would earn a total of 2,686,661 from holding Tien Phong Plastic or generate 80.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Danang Rubber JSC vs. Tien Phong Plastic
Performance |
| Timeline |
| Danang Rubber JSC |
| Tien Phong Plastic |
Danang Rubber and Tien Phong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danang Rubber and Tien Phong
The main advantage of trading using opposite Danang Rubber and Tien Phong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danang Rubber position performs unexpectedly, Tien Phong 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 Tien Phong will offset losses from the drop in Tien Phong's long position.| Danang Rubber vs. FIT INVEST JSC | Danang Rubber vs. Damsan JSC | Danang Rubber vs. An Phat Plastic | Danang Rubber vs. Alphanam ME |
| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. Alphanam ME |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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