Correlation Between Din Capital and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Din Capital and Thanh Dat 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 Din Capital and Thanh Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Thanh Dat Investment, you can compare the effects of market volatilities on Din Capital and Thanh Dat 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 Din Capital with a short position of Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Thanh Dat.
Diversification Opportunities for Din Capital and Thanh Dat
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Din and Thanh is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat Investment and Din Capital 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 Din Capital Investment are associated (or correlated) with Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Din Capital i.e., Din Capital and Thanh Dat go up and down completely randomly.
Pair Corralation between Din Capital and Thanh Dat
Assuming the 90 days trading horizon Din Capital Investment is expected to under-perform the Thanh Dat. But the stock apears to be less risky and, when comparing its historical volatility, Din Capital Investment is 1.21 times less risky than Thanh Dat. The stock trades about -0.05 of its potential returns per unit of risk. The Thanh Dat Investment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,700,000 in Thanh Dat Investment on September 15, 2024 and sell it today you would lose (40,000) from holding Thanh Dat Investment or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Din Capital Investment vs. Thanh Dat Investment
Performance |
| Timeline |
| Din Capital Investment |
| Thanh Dat Investment |
Din Capital and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Din Capital and Thanh Dat
The main advantage of trading using opposite Din Capital and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.| Din Capital vs. DIC Holdings Construction | Din Capital vs. Hochiminh City Metal | Din Capital vs. Binh Duong Trade | Din Capital vs. Kien Giang Construction |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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