Correlation Between Tien Phong and VNDIRECT Securities
Can any of the company-specific risk be diversified away by investing in both Tien Phong and VNDIRECT Securities 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 VNDIRECT Securities 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 VNDIRECT Securities Corp, you can compare the effects of market volatilities on Tien Phong and VNDIRECT Securities 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 VNDIRECT Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Phong and VNDIRECT Securities.
Diversification Opportunities for Tien Phong and VNDIRECT Securities
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tien and VNDIRECT is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and VNDIRECT Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNDIRECT Securities Corp 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 VNDIRECT Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNDIRECT Securities Corp has no effect on the direction of Tien Phong i.e., Tien Phong and VNDIRECT Securities go up and down completely randomly.
Pair Corralation between Tien Phong and VNDIRECT Securities
Assuming the 90 days trading horizon Tien Phong Plastic is expected to generate 1.49 times more return on investment than VNDIRECT Securities. However, Tien Phong is 1.49 times more volatile than VNDIRECT Securities Corp. It trades about -0.01 of its potential returns per unit of risk. VNDIRECT Securities Corp is currently generating about -0.15 per unit of risk. If you would invest 5,900,000 in Tien Phong Plastic on August 31, 2024 and sell it today you would lose (50,000) from holding Tien Phong Plastic or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Phong Plastic vs. VNDIRECT Securities Corp
Performance |
| Timeline |
| Tien Phong Plastic |
| VNDIRECT Securities Corp |
Tien Phong and VNDIRECT Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Phong and VNDIRECT Securities
The main advantage of trading using opposite Tien Phong and VNDIRECT Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Phong position performs unexpectedly, VNDIRECT Securities 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 VNDIRECT Securities will offset losses from the drop in VNDIRECT Securities' long position.| Tien Phong vs. FIT INVEST JSC | Tien Phong vs. Damsan JSC | Tien Phong vs. An Phat Plastic | Tien Phong vs. Alphanam ME |
| VNDIRECT Securities vs. BaoMinh Insurance Corp | VNDIRECT Securities vs. Tien Phong Plastic | VNDIRECT Securities vs. VietinBank Securities JSC | VNDIRECT Securities vs. Viet Thanh Plastic |
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 Stocks Directory module to find actively traded stocks across global markets.
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