Correlation Between TDT Investment and Dong A
Can any of the company-specific risk be diversified away by investing in both TDT Investment and Dong A 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 TDT Investment and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDT Investment and and Dong A Hotel, you can compare the effects of market volatilities on TDT Investment and Dong A 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 TDT Investment with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDT Investment and Dong A.
Diversification Opportunities for TDT Investment and Dong A
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TDT and Dong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TDT Investment and and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and TDT Investment 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 TDT Investment and are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of TDT Investment i.e., TDT Investment and Dong A go up and down completely randomly.
Pair Corralation between TDT Investment and Dong A
Assuming the 90 days trading horizon TDT Investment is expected to generate 1.65 times less return on investment than Dong A. But when comparing it to its historical volatility, TDT Investment and is 1.92 times less risky than Dong A. It trades about 0.13 of its potential returns per unit of risk. Dong A Hotel is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 342,000 in Dong A Hotel on November 8, 2024 and sell it today you would earn a total of 16,000 from holding Dong A Hotel or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
TDT Investment and vs. Dong A Hotel
Performance |
| Timeline |
| TDT Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Dong A Hotel |
TDT Investment and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDT Investment and Dong A
The main advantage of trading using opposite TDT Investment and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDT Investment position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| TDT Investment vs. Ben Thanh Rubber | TDT Investment vs. Transport and Industry | TDT Investment vs. Innovative Technology Development | TDT Investment vs. Mobile World Investment |
| Dong A vs. Bao Ngoc Investment | Dong A vs. Hcd Investment Producing | Dong A vs. Vincom Retail JSC | Dong A vs. FPT Digital Retail |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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