Correlation Between Tin Nghia and LDG Investment
Can any of the company-specific risk be diversified away by investing in both Tin Nghia and LDG 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 LDG 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 LDG Investment JSC, you can compare the effects of market volatilities on Tin Nghia and LDG 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 LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tin Nghia and LDG Investment.
Diversification Opportunities for Tin Nghia and LDG Investment
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tin and LDG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of Tin Nghia i.e., Tin Nghia and LDG Investment go up and down completely randomly.
Pair Corralation between Tin Nghia and LDG Investment
Assuming the 90 days trading horizon Tin Nghia Industrial is expected to generate 0.86 times more return on investment than LDG Investment. However, Tin Nghia Industrial is 1.16 times less risky than LDG Investment. It trades about 0.01 of its potential returns per unit of risk. LDG Investment JSC is currently generating about -0.08 per unit of risk. If you would invest 2,144,250 in Tin Nghia Industrial on August 25, 2024 and sell it today you would earn a total of 25,750 from holding Tin Nghia Industrial or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tin Nghia Industrial vs. LDG Investment JSC
Performance |
| Timeline |
| Tin Nghia Industrial |
| LDG Investment JSC |
Tin Nghia and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tin Nghia and LDG Investment
The main advantage of trading using opposite Tin Nghia and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tin Nghia position performs unexpectedly, LDG 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 LDG Investment will offset losses from the drop in LDG 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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