Correlation Between Thanh Dat and Pha Le
Can any of the company-specific risk be diversified away by investing in both Thanh Dat and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Thanh Dat and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Pha Le.
Diversification Opportunities for Thanh Dat and Pha Le
Excellent diversification
The 3 months correlation between Thanh and Pha is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Thanh Dat i.e., Thanh Dat and Pha Le go up and down completely randomly.
Pair Corralation between Thanh Dat and Pha Le
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 1.22 times more return on investment than Pha Le. However, Thanh Dat is 1.22 times more volatile than Pha Le Plastics. It trades about 0.07 of its potential returns per unit of risk. Pha Le Plastics is currently generating about -0.04 per unit of risk. If you would invest 2,560,000 in Thanh Dat Investment on September 1, 2024 and sell it today you would earn a total of 90,000 from holding Thanh Dat Investment or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanh Dat Investment vs. Pha Le Plastics
Performance |
| Timeline |
| Thanh Dat Investment |
| Pha Le Plastics |
Thanh Dat and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Pha Le
The main advantage of trading using opposite Thanh Dat and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| Thanh Dat vs. Danang Education Investment | Thanh Dat vs. Sao Ta Foods | Thanh Dat vs. VTC Telecommunications JSC | Thanh Dat vs. Bao Ngoc Investment |
| Pha Le vs. Saigon Telecommunication Technologies | Pha Le vs. Tin Nghia Industrial | Pha Le vs. Transimex Transportation JSC | Pha Le vs. Thanh Dat 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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