Correlation Between TDT Investment and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both TDT Investment and Viet Thanh 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 Viet Thanh 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 Viet Thanh Plastic, you can compare the effects of market volatilities on TDT Investment and Viet Thanh 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 Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDT Investment and Viet Thanh.
Diversification Opportunities for TDT Investment and Viet Thanh
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TDT and Viet is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding TDT Investment and and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic 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 Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of TDT Investment i.e., TDT Investment and Viet Thanh go up and down completely randomly.
Pair Corralation between TDT Investment and Viet Thanh
Assuming the 90 days trading horizon TDT Investment is expected to generate 9.53 times less return on investment than Viet Thanh. But when comparing it to its historical volatility, TDT Investment and is 1.83 times less risky than Viet Thanh. It trades about 0.01 of its potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 890,000 in Viet Thanh Plastic on November 1, 2024 and sell it today you would earn a total of 850,000 from holding Viet Thanh Plastic or generate 95.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
TDT Investment and vs. Viet Thanh Plastic
Performance |
| Timeline |
| TDT Investment |
| Viet Thanh Plastic |
TDT Investment and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDT Investment and Viet Thanh
The main advantage of trading using opposite TDT Investment and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDT Investment position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.| TDT Investment vs. Petrolimex Information Technology | TDT Investment vs. Vincom Retail JSC | TDT Investment vs. FPT Digital Retail | TDT Investment vs. Picomat Plastic JSC |
| Viet Thanh vs. Petrovietnam Drilling Mud | Viet Thanh vs. Nam Kim Steel | Viet Thanh vs. Petrovietnam Technical Services | Viet Thanh vs. Innovative Technology Development |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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