Correlation Between Tin Nghia and South Basic
Can any of the company-specific risk be diversified away by investing in both Tin Nghia and South Basic 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 Tin Nghia and South Basic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tin Nghia Industrial and South Basic Chemicals, you can compare the effects of market volatilities on Tin Nghia and South Basic 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 Tin Nghia with a short position of South Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tin Nghia and South Basic.
Diversification Opportunities for Tin Nghia and South Basic
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tin and South is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and South Basic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Basic Chemicals and Tin Nghia 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 Tin Nghia Industrial are associated (or correlated) with South Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Basic Chemicals has no effect on the direction of Tin Nghia i.e., Tin Nghia and South Basic go up and down completely randomly.
Pair Corralation between Tin Nghia and South Basic
Assuming the 90 days trading horizon Tin Nghia Industrial is expected to generate 0.47 times more return on investment than South Basic. However, Tin Nghia Industrial is 2.12 times less risky than South Basic. It trades about -0.16 of its potential returns per unit of risk. South Basic Chemicals is currently generating about -0.32 per unit of risk. If you would invest 2,140,000 in Tin Nghia Industrial on November 3, 2024 and sell it today you would lose (50,000) from holding Tin Nghia Industrial or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tin Nghia Industrial vs. South Basic Chemicals
Performance |
| Timeline |
| Tin Nghia Industrial |
| South Basic Chemicals |
Tin Nghia and South Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tin Nghia and South Basic
The main advantage of trading using opposite Tin Nghia and South Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tin Nghia position performs unexpectedly, South Basic 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 South Basic will offset losses from the drop in South Basic's long position.| Tin Nghia vs. FIT INVEST JSC | Tin Nghia vs. Damsan JSC | Tin Nghia vs. An Phat Plastic | Tin Nghia vs. APG Securities Joint |
| South Basic vs. Vien Dong Investment | South Basic vs. VTC Telecommunications JSC | South Basic vs. HUD1 Investment and | South Basic vs. PostTelecommunication Equipment |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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