Correlation Between Thanh Dat and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Thanh Dat and Binh Duong 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 Binh Duong 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 Binh Duong Trade, you can compare the effects of market volatilities on Thanh Dat and Binh Duong 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 Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Binh Duong.
Diversification Opportunities for Thanh Dat and Binh Duong
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thanh and Binh is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Thanh Dat i.e., Thanh Dat and Binh Duong go up and down completely randomly.
Pair Corralation between Thanh Dat and Binh Duong
Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 3.01 times more return on investment than Binh Duong. However, Thanh Dat is 3.01 times more volatile than Binh Duong Trade. It trades about 0.07 of its potential returns per unit of risk. Binh Duong Trade is currently generating about 0.08 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanh Dat Investment vs. Binh Duong Trade
Performance |
| Timeline |
| Thanh Dat Investment |
| Binh Duong Trade |
Thanh Dat and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Dat and Binh Duong
The main advantage of trading using opposite Thanh Dat and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Dat position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong'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 |
| Binh Duong vs. Elcom Technology Communications | Binh Duong vs. Post and Telecommunications | Binh Duong vs. South Basic Chemicals | Binh Duong vs. Saigon Telecommunication Technologies |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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