Correlation Between Hochiminh City and Tien Giang
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Tien Giang 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 Hochiminh City and Tien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochiminh City Metal and Tien Giang Investment, you can compare the effects of market volatilities on Hochiminh City and Tien Giang 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 Hochiminh City with a short position of Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Tien Giang.
Diversification Opportunities for Hochiminh City and Tien Giang
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hochiminh and Tien is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang Investment and Hochiminh City 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 Hochiminh City Metal are associated (or correlated) with Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Hochiminh City i.e., Hochiminh City and Tien Giang go up and down completely randomly.
Pair Corralation between Hochiminh City and Tien Giang
Assuming the 90 days trading horizon Hochiminh City Metal is expected to under-perform the Tien Giang. But the stock apears to be less risky and, when comparing its historical volatility, Hochiminh City Metal is 1.11 times less risky than Tien Giang. The stock trades about -0.1 of its potential returns per unit of risk. The Tien Giang Investment is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,390,000 in Tien Giang Investment on August 25, 2024 and sell it today you would lose (40,000) from holding Tien Giang Investment or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Tien Giang Investment
Performance |
| Timeline |
| Hochiminh City Metal |
| Tien Giang Investment |
Hochiminh City and Tien Giang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Tien Giang
The main advantage of trading using opposite Hochiminh City and Tien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Tien Giang 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 Giang will offset losses from the drop in Tien Giang's long position.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. APG Securities Joint |
| Tien Giang vs. FIT INVEST JSC | Tien Giang vs. Damsan JSC | Tien Giang vs. An Phat Plastic | Tien Giang vs. APG Securities Joint |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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