Correlation Between LDG Investment and TDG Global
Can any of the company-specific risk be diversified away by investing in both LDG Investment and TDG Global 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 LDG Investment and TDG Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LDG Investment JSC and TDG Global Investment, you can compare the effects of market volatilities on LDG Investment and TDG Global 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 LDG Investment with a short position of TDG Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and TDG Global.
Diversification Opportunities for LDG Investment and TDG Global
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LDG and TDG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and TDG Global Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDG Global Investment and LDG Investment 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 LDG Investment JSC are associated (or correlated) with TDG Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDG Global Investment has no effect on the direction of LDG Investment i.e., LDG Investment and TDG Global go up and down completely randomly.
Pair Corralation between LDG Investment and TDG Global
Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the TDG Global. In addition to that, LDG Investment is 1.05 times more volatile than TDG Global Investment. It trades about -0.06 of its total potential returns per unit of risk. TDG Global Investment is currently generating about 0.04 per unit of volatility. If you would invest 276,667 in TDG Global Investment on August 31, 2024 and sell it today you would earn a total of 89,333 from holding TDG Global Investment or generate 32.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. TDG Global Investment
Performance |
| Timeline |
| LDG Investment JSC |
| TDG Global Investment |
LDG Investment and TDG Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and TDG Global
The main advantage of trading using opposite LDG Investment and TDG Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, TDG Global 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 TDG Global will offset losses from the drop in TDG Global's long position.| LDG Investment vs. Taseco Air Services | LDG Investment vs. Vietnam Rubber Group | LDG Investment vs. Thong Nhat Rubber | LDG Investment vs. Materials Petroleum JSC |
| TDG Global vs. HUD1 Investment and | TDG Global vs. LDG Investment JSC | TDG Global vs. Post and Telecommunications | TDG Global vs. Danang Education 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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