Correlation Between Pha Le and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Pha Le and Tin Nghia 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 Pha Le and Tin Nghia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Le Plastics and Tin Nghia Industrial, you can compare the effects of market volatilities on Pha Le and Tin Nghia 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 Pha Le with a short position of Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Le and Tin Nghia.
Diversification Opportunities for Pha Le and Tin Nghia
Very good diversification
The 3 months correlation between Pha and Tin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pha Le Plastics and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial and Pha Le 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 Pha Le Plastics are associated (or correlated) with Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Pha Le i.e., Pha Le and Tin Nghia go up and down completely randomly.
Pair Corralation between Pha Le and Tin Nghia
Assuming the 90 days trading horizon Pha Le Plastics is expected to generate 2.15 times more return on investment than Tin Nghia. However, Pha Le is 2.15 times more volatile than Tin Nghia Industrial. It trades about 0.04 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.16 per unit of risk. If you would invest 495,000 in Pha Le Plastics on November 3, 2024 and sell it today you would earn a total of 5,000 from holding Pha Le Plastics or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Le Plastics vs. Tin Nghia Industrial
Performance |
| Timeline |
| Pha Le Plastics |
| Tin Nghia Industrial |
Pha Le and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Le and Tin Nghia
The main advantage of trading using opposite Pha Le and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Le position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Pha Le vs. Investment and Industrial | Pha Le vs. Transport and Industry | Pha Le vs. Petrovietnam Technical Services | Pha Le vs. Song Hong Aluminum |
| Tin Nghia vs. Saigon Beer Alcohol | Tin Nghia vs. Vietnam National Reinsurance | Tin Nghia vs. Fecon Mining JSC | Tin Nghia vs. DIC Holdings Construction |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |