Correlation Between Thong Nhat and LDG Investment
Can any of the company-specific risk be diversified away by investing in both Thong Nhat 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 Thong Nhat and LDG Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thong Nhat Rubber and LDG Investment JSC, you can compare the effects of market volatilities on Thong Nhat 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 Thong Nhat with a short position of LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thong Nhat and LDG Investment.
Diversification Opportunities for Thong Nhat and LDG Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thong and LDG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Thong Nhat Rubber 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 Thong Nhat 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 Thong Nhat Rubber 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 Thong Nhat i.e., Thong Nhat and LDG Investment go up and down completely randomly.
Pair Corralation between Thong Nhat and LDG Investment
Assuming the 90 days trading horizon Thong Nhat Rubber is expected to under-perform the LDG Investment. In addition to that, Thong Nhat is 1.68 times more volatile than LDG Investment JSC. It trades about -0.04 of its total potential returns per unit of risk. LDG Investment JSC is currently generating about 0.0 per unit of volatility. If you would invest 186,000 in LDG Investment JSC on September 2, 2024 and sell it today you would lose (2,000) from holding LDG Investment JSC or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.5% |
| Values | Daily Returns |
Thong Nhat Rubber vs. LDG Investment JSC
Performance |
| Timeline |
| Thong Nhat Rubber |
| LDG Investment JSC |
Thong Nhat and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thong Nhat and LDG Investment
The main advantage of trading using opposite Thong Nhat and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thong Nhat 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.| Thong Nhat vs. BaoMinh Insurance Corp | Thong Nhat vs. Song Hong Aluminum | Thong Nhat vs. Hanoi Beer Alcohol | Thong Nhat vs. Southern Rubber Industry |
| LDG Investment vs. Global Electrical Technology | LDG Investment vs. Everland Investment JSC | LDG Investment vs. Fecon Mining JSC | LDG Investment vs. Hanoi Beer Trading |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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