Correlation Between Tien Phong and Sea Air
Can any of the company-specific risk be diversified away by investing in both Tien Phong and Sea Air 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 Sea Air 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 Sea Air Freight, you can compare the effects of market volatilities on Tien Phong and Sea Air 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 Sea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and Sea Air.
Diversification Opportunities for Tien Phong and Sea Air
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tien and Sea is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and Sea Air Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Air Freight 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 Sea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Air Freight has no effect on the direction of Tien Phong i.e., Tien Phong and Sea Air go up and down completely randomly.
Pair Corralation between Tien Phong and Sea Air
Assuming the 90 days trading horizon Tien Phong Plastic is expected to under-perform the Sea Air. In addition to that, Tien Phong is 1.82 times more volatile than Sea Air Freight. It trades about -0.15 of its total potential returns per unit of risk. Sea Air Freight is currently generating about -0.17 per unit of volatility. If you would invest 3,190,000 in Sea Air Freight on October 13, 2024 and sell it today you would lose (110,000) from holding Sea Air Freight or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Tien Phong Plastic vs. Sea Air Freight
Performance |
| Timeline |
| Tien Phong Plastic |
| Sea Air Freight |
Tien Phong and Sea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and Sea Air
The main advantage of trading using opposite Tien Phong and Sea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong position performs unexpectedly, Sea Air 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 Sea Air will offset losses from the drop in Sea Air's long position.| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. APG Securities Joint |
| Sea Air vs. FIT INVEST JSC | Sea Air vs. Damsan JSC | Sea Air vs. An Phat Plastic | Sea Air 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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