Correlation Between Pha Lai and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Pha Lai 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 Pha Lai and Thanh Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Lai Thermal and Thanh Dat Investment, you can compare the effects of market volatilities on Pha Lai 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 Pha Lai with a short position of Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Thanh Dat.
Diversification Opportunities for Pha Lai and Thanh Dat
Very good diversification
The 3 months correlation between Pha and Thanh is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal 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 Pha Lai 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 Lai Thermal 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 Pha Lai i.e., Pha Lai and Thanh Dat go up and down completely randomly.
Pair Corralation between Pha Lai and Thanh Dat
Assuming the 90 days trading horizon Pha Lai Thermal is expected to under-perform the Thanh Dat. But the stock apears to be less risky and, when comparing its historical volatility, Pha Lai Thermal is 1.98 times less risky than Thanh Dat. The stock trades about -0.36 of its potential returns per unit of risk. The Thanh Dat Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,560,000 in Thanh Dat Investment on September 1, 2024 and sell it today you would earn a total of 90,000 from holding Thanh Dat Investment or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pha Lai Thermal vs. Thanh Dat Investment
Performance |
| Timeline |
| Pha Lai Thermal |
| Thanh Dat Investment |
Pha Lai and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Thanh Dat
The main advantage of trading using opposite Pha Lai and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai 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.The idea behind Pha Lai Thermal and Thanh Dat Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thanh Dat vs. Danang Education Investment | Thanh Dat vs. Sao Ta Foods | Thanh Dat vs. VTC Telecommunications JSC | Thanh Dat vs. Bao Ngoc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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