Correlation Between Tin Nghia and HUD1 Investment
Can any of the company-specific risk be diversified away by investing in both Tin Nghia and HUD1 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 Tin Nghia and HUD1 Investment 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 HUD1 Investment and, you can compare the effects of market volatilities on Tin Nghia and HUD1 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 Tin Nghia with a short position of HUD1 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tin Nghia and HUD1 Investment.
Diversification Opportunities for Tin Nghia and HUD1 Investment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tin and HUD1 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and HUD1 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUD1 Investment 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 HUD1 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUD1 Investment has no effect on the direction of Tin Nghia i.e., Tin Nghia and HUD1 Investment go up and down completely randomly.
Pair Corralation between Tin Nghia and HUD1 Investment
Assuming the 90 days trading horizon Tin Nghia Industrial is expected to under-perform the HUD1 Investment. But the stock apears to be less risky and, when comparing its historical volatility, Tin Nghia Industrial is 3.04 times less risky than HUD1 Investment. The stock trades about -0.11 of its potential returns per unit of risk. The HUD1 Investment and is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 580,000 in HUD1 Investment and on August 25, 2024 and sell it today you would earn a total of 21,000 from holding HUD1 Investment and or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.87% |
| Values | Daily Returns |
Tin Nghia Industrial vs. HUD1 Investment and
Performance |
| Timeline |
| Tin Nghia Industrial |
| HUD1 Investment |
Tin Nghia and HUD1 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tin Nghia and HUD1 Investment
The main advantage of trading using opposite Tin Nghia and HUD1 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tin Nghia position performs unexpectedly, HUD1 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 HUD1 Investment will offset losses from the drop in HUD1 Investment's long position.| Tin Nghia vs. Binh Duong Trade | Tin Nghia vs. Vietnam National Reinsurance | Tin Nghia vs. BIDV Insurance Corp | Tin Nghia vs. Techno Agricultural Supplying |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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