Correlation Between Hochiminh City and Tay Ninh
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Tay Ninh 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 Tay Ninh 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 Tay Ninh Rubber, you can compare the effects of market volatilities on Hochiminh City and Tay Ninh 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 Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Tay Ninh.
Diversification Opportunities for Hochiminh City and Tay Ninh
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hochiminh and Tay is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Tay Ninh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh Rubber 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 Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Rubber has no effect on the direction of Hochiminh City i.e., Hochiminh City and Tay Ninh go up and down completely randomly.
Pair Corralation between Hochiminh City and Tay Ninh
Assuming the 90 days trading horizon Hochiminh City Metal is expected to under-perform the Tay Ninh. But the stock apears to be less risky and, when comparing its historical volatility, Hochiminh City Metal is 2.97 times less risky than Tay Ninh. The stock trades about -0.1 of its potential returns per unit of risk. The Tay Ninh Rubber is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,290,000 in Tay Ninh Rubber on August 25, 2024 and sell it today you would earn a total of 320,000 from holding Tay Ninh Rubber or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hochiminh City Metal vs. Tay Ninh Rubber
Performance |
| Timeline |
| Hochiminh City Metal |
| Tay Ninh Rubber |
Hochiminh City and Tay Ninh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Tay Ninh
The main advantage of trading using opposite Hochiminh City and Tay Ninh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Tay Ninh 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 Tay Ninh will offset losses from the drop in Tay Ninh'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 |
| Tay Ninh vs. Fecon Mining JSC | Tay Ninh vs. Hochiminh City Metal | Tay Ninh vs. BIDV Insurance Corp | Tay Ninh vs. Petrovietnam Technical Services |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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