Correlation Between Vu Dang and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both Vu Dang and Tienlen Steel 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 Vu Dang and Tienlen Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vu Dang Investment and Tienlen Steel Corp, you can compare the effects of market volatilities on Vu Dang and Tienlen Steel 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 Vu Dang with a short position of Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Tienlen Steel.
Diversification Opportunities for Vu Dang and Tienlen Steel
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SVD and Tienlen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp and Vu Dang 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 Vu Dang Investment are associated (or correlated) with Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of Vu Dang i.e., Vu Dang and Tienlen Steel go up and down completely randomly.
Pair Corralation between Vu Dang and Tienlen Steel
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 1.59 times more return on investment than Tienlen Steel. However, Vu Dang is 1.59 times more volatile than Tienlen Steel Corp. It trades about 0.12 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.46 per unit of risk. If you would invest 330,000 in Vu Dang Investment on August 31, 2024 and sell it today you would earn a total of 19,000 from holding Vu Dang Investment or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vu Dang Investment vs. Tienlen Steel Corp
Performance |
| Timeline |
| Vu Dang Investment |
| Tienlen Steel Corp |
Vu Dang and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Tienlen Steel
The main advantage of trading using opposite Vu Dang and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| Vu Dang vs. Ben Thanh Rubber | Vu Dang vs. Vietnam JSCmmercial Bank | Vu Dang vs. Investment and Industrial | Vu Dang vs. Tienlen Steel Corp |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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