Correlation Between Tienlen Steel and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Tienlen Steel and Binh Duong 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 Tienlen Steel and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tienlen Steel Corp and Binh Duong Trade, you can compare the effects of market volatilities on Tienlen Steel and Binh Duong 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 Tienlen Steel with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tienlen Steel and Binh Duong.
Diversification Opportunities for Tienlen Steel and Binh Duong
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tienlen and Binh is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tienlen Steel Corp and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade and Tienlen Steel 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 Tienlen Steel Corp are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of Tienlen Steel i.e., Tienlen Steel and Binh Duong go up and down completely randomly.
Pair Corralation between Tienlen Steel and Binh Duong
Assuming the 90 days trading horizon Tienlen Steel Corp is expected to under-perform the Binh Duong. But the stock apears to be less risky and, when comparing its historical volatility, Tienlen Steel Corp is 1.04 times less risky than Binh Duong. The stock trades about -0.04 of its potential returns per unit of risk. The Binh Duong Trade is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 968,000 in Binh Duong Trade on December 12, 2024 and sell it today you would earn a total of 362,000 from holding Binh Duong Trade or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tienlen Steel Corp vs. Binh Duong Trade
Performance |
| Timeline |
| Tienlen Steel Corp |
| Binh Duong Trade |
Tienlen Steel and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tienlen Steel and Binh Duong
The main advantage of trading using opposite Tienlen Steel and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tienlen Steel position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| Tienlen Steel vs. HUD1 Investment and | ||
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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