Correlation Between Pha Lai and Tien Giang
Can any of the company-specific risk be diversified away by investing in both Pha Lai and Tien Giang 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 Tien Giang 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 Tien Giang Investment, you can compare the effects of market volatilities on Pha Lai and Tien Giang 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 Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Tien Giang.
Diversification Opportunities for Pha Lai and Tien Giang
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pha and Tien is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang 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 Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Pha Lai i.e., Pha Lai and Tien Giang go up and down completely randomly.
Pair Corralation between Pha Lai and Tien Giang
Assuming the 90 days trading horizon Pha Lai is expected to generate 11.65 times less return on investment than Tien Giang. But when comparing it to its historical volatility, Pha Lai Thermal is 2.21 times less risky than Tien Giang. It trades about 0.07 of its potential returns per unit of risk. Tien Giang Investment is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,400,000 in Tien Giang Investment on October 30, 2024 and sell it today you would earn a total of 1,050,000 from holding Tien Giang Investment or generate 23.86% 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. Tien Giang Investment
Performance |
| Timeline |
| Pha Lai Thermal |
| Tien Giang Investment |
Pha Lai and Tien Giang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Tien Giang
The main advantage of trading using opposite Pha Lai and Tien Giang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai position performs unexpectedly, Tien Giang 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 Tien Giang will offset losses from the drop in Tien Giang's long position.| Pha Lai vs. Military Insurance Corp | Pha Lai vs. Elcom Technology Communications | Pha Lai vs. BaoMinh Insurance Corp | Pha Lai vs. PVI Reinsurance Corp |
| Tien Giang vs. Investment And Construction | Tien Giang vs. Binh Duong Construction | Tien Giang vs. Agriculture Printing and | Tien Giang vs. Truong Thanh Furniture |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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