Correlation Between Tienlen Steel and Vietnam National
Can any of the company-specific risk be diversified away by investing in both Tienlen Steel and Vietnam National 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 Vietnam National 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 Vietnam National Reinsurance, you can compare the effects of market volatilities on Tienlen Steel and Vietnam National 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 Vietnam National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tienlen Steel and Vietnam National.
Diversification Opportunities for Tienlen Steel and Vietnam National
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tienlen and Vietnam is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tienlen Steel Corp and Vietnam National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam National Rei 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 Vietnam National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam National Rei has no effect on the direction of Tienlen Steel i.e., Tienlen Steel and Vietnam National go up and down completely randomly.
Pair Corralation between Tienlen Steel and Vietnam National
Assuming the 90 days trading horizon Tienlen Steel Corp is expected to under-perform the Vietnam National. In addition to that, Tienlen Steel is 2.01 times more volatile than Vietnam National Reinsurance. It trades about -0.12 of its total potential returns per unit of risk. Vietnam National Reinsurance is currently generating about 0.04 per unit of volatility. If you would invest 2,018,605 in Vietnam National Reinsurance on October 24, 2024 and sell it today you would earn a total of 151,395 from holding Vietnam National Reinsurance or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tienlen Steel Corp vs. Vietnam National Reinsurance
Performance |
| Timeline |
| Tienlen Steel Corp |
| Vietnam National Rei |
Tienlen Steel and Vietnam National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tienlen Steel and Vietnam National
The main advantage of trading using opposite Tienlen Steel and Vietnam National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tienlen Steel position performs unexpectedly, Vietnam National 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 Vietnam National will offset losses from the drop in Vietnam National's long position.| Tienlen Steel vs. FIT INVEST JSC | Tienlen Steel vs. Damsan JSC | Tienlen Steel vs. An Phat Plastic | Tienlen Steel vs. APG Securities Joint |
| Vietnam National vs. BaoMinh Insurance Corp | Vietnam National vs. Nam Kim Steel | Vietnam National vs. Saigon Telecommunication Technologies | Vietnam National vs. Tienlen Steel Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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