Correlation Between Thanh Dat and Mechanics Construction
Can any of the company-specific risk be diversified away by investing in both Thanh Dat and Mechanics Construction 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 Thanh Dat and Mechanics Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanh Dat Investment and Mechanics Construction and, you can compare the effects of market volatilities on Thanh Dat and Mechanics Construction 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 Thanh Dat with a short position of Mechanics Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Mechanics Construction.
Diversification Opportunities for Thanh Dat and Mechanics Construction
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thanh and Mechanics is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Mechanics Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanics Construction and Thanh Dat 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 Thanh Dat Investment are associated (or correlated) with Mechanics Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechanics Construction has no effect on the direction of Thanh Dat i.e., Thanh Dat and Mechanics Construction go up and down completely randomly.
Pair Corralation between Thanh Dat and Mechanics Construction
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 1.49 times more return on investment than Mechanics Construction. However, Thanh Dat is 1.49 times more volatile than Mechanics Construction and. It trades about 0.08 of its potential returns per unit of risk. Mechanics Construction and is currently generating about 0.05 per unit of risk. If you would invest 945,180 in Thanh Dat Investment on October 16, 2024 and sell it today you would earn a total of 1,624,820 from holding Thanh Dat Investment or generate 171.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.87% |
| Values | Daily Returns |
Thanh Dat Investment vs. Mechanics Construction and
Performance |
| Timeline |
| Thanh Dat Investment |
| Mechanics Construction |
Thanh Dat and Mechanics Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Mechanics Construction
The main advantage of trading using opposite Thanh Dat and Mechanics Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat position performs unexpectedly, Mechanics Construction 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 Mechanics Construction will offset losses from the drop in Mechanics Construction's long position.| Thanh Dat vs. Hai An Transport | Thanh Dat vs. Danang Education Investment | Thanh Dat vs. Hoang Huy Investment | Thanh Dat vs. Vietnam Petroleum Transport |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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