Correlation Between Tien Phong and Danang Rubber
Can any of the company-specific risk be diversified away by investing in both Tien Phong and Danang Rubber 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 Tien Phong and Danang Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Phong Plastic and Danang Rubber JSC, you can compare the effects of market volatilities on Tien Phong and Danang Rubber 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 Tien Phong with a short position of Danang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and Danang Rubber.
Diversification Opportunities for Tien Phong and Danang Rubber
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tien and Danang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and Danang Rubber JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Rubber JSC and Tien Phong 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 Tien Phong Plastic are associated (or correlated) with Danang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Rubber JSC has no effect on the direction of Tien Phong i.e., Tien Phong and Danang Rubber go up and down completely randomly.
Pair Corralation between Tien Phong and Danang Rubber
Assuming the 90 days trading horizon Tien Phong Plastic is expected to generate 1.23 times more return on investment than Danang Rubber. However, Tien Phong is 1.23 times more volatile than Danang Rubber JSC. It trades about -0.05 of its potential returns per unit of risk. Danang Rubber JSC is currently generating about -0.15 per unit of risk. If you would invest 6,130,000 in Tien Phong Plastic on August 31, 2024 and sell it today you would lose (280,000) from holding Tien Phong Plastic or give up 4.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Phong Plastic vs. Danang Rubber JSC
Performance |
| Timeline |
| Tien Phong Plastic |
| Danang Rubber JSC |
Tien Phong and Danang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and Danang Rubber
The main advantage of trading using opposite Tien Phong and Danang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong position performs unexpectedly, Danang Rubber 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 Danang Rubber will offset losses from the drop in Danang Rubber's long position.| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. Alphanam ME |
| Danang Rubber vs. LDG Investment JSC | Danang Rubber vs. 577 Investment Corp | Danang Rubber vs. Thanh Dat Investment | Danang Rubber vs. Din Capital 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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