Correlation Between Tien Giang and HVC Investment
Can any of the company-specific risk be diversified away by investing in both Tien Giang and HVC Investment 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 Tien Giang and HVC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and HVC Investment and, you can compare the effects of market volatilities on Tien Giang and HVC Investment 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 Tien Giang with a short position of HVC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and HVC Investment.
Diversification Opportunities for Tien Giang and HVC Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tien and HVC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and HVC Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HVC Investment and Tien Giang 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 Tien Giang Investment are associated (or correlated) with HVC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HVC Investment has no effect on the direction of Tien Giang i.e., Tien Giang and HVC Investment go up and down completely randomly.
Pair Corralation between Tien Giang and HVC Investment
Assuming the 90 days trading horizon Tien Giang Investment is expected to generate 0.41 times more return on investment than HVC Investment. However, Tien Giang Investment is 2.45 times less risky than HVC Investment. It trades about 0.31 of its potential returns per unit of risk. HVC Investment and is currently generating about 0.07 per unit of risk. If you would invest 4,510,000 in Tien Giang Investment on October 16, 2024 and sell it today you would earn a total of 380,000 from holding Tien Giang Investment or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Giang Investment vs. HVC Investment and
Performance |
| Timeline |
| Tien Giang Investment |
| HVC Investment |
Tien Giang and HVC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Giang and HVC Investment
The main advantage of trading using opposite Tien Giang and HVC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang position performs unexpectedly, HVC Investment 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 HVC Investment will offset losses from the drop in HVC Investment's long position.| Tien Giang vs. FPT Digital Retail | Tien Giang vs. Hochiminh City Metal | Tien Giang vs. South Basic Chemicals | Tien Giang vs. Pha Lai Thermal |
| HVC Investment vs. BaoMinh Insurance Corp | HVC Investment vs. Innovative Technology Development | HVC Investment vs. Elcom Technology Communications | HVC Investment vs. Danang Education 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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