Correlation Between Transimex Transportation and Viet Thanh
Can any of the company-specific risk be diversified away by investing in both Transimex Transportation and Viet Thanh 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 Transimex Transportation and Viet Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transimex Transportation JSC and Viet Thanh Plastic, you can compare the effects of market volatilities on Transimex Transportation and Viet Thanh 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 Transimex Transportation with a short position of Viet Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transimex Transportation and Viet Thanh.
Diversification Opportunities for Transimex Transportation and Viet Thanh
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transimex and Viet is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Transimex Transportation JSC and Viet Thanh Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viet Thanh Plastic and Transimex Transportation 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 Transimex Transportation JSC are associated (or correlated) with Viet Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viet Thanh Plastic has no effect on the direction of Transimex Transportation i.e., Transimex Transportation and Viet Thanh go up and down completely randomly.
Pair Corralation between Transimex Transportation and Viet Thanh
Assuming the 90 days trading horizon Transimex Transportation is expected to generate 1.1 times less return on investment than Viet Thanh. In addition to that, Transimex Transportation is 1.0 times more volatile than Viet Thanh Plastic. It trades about 0.07 of its total potential returns per unit of risk. Viet Thanh Plastic is currently generating about 0.07 per unit of volatility. If you would invest 680,000 in Viet Thanh Plastic on August 28, 2024 and sell it today you would earn a total of 900,000 from holding Viet Thanh Plastic or generate 132.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.87% |
| Values | Daily Returns |
Transimex Transportation JSC vs. Viet Thanh Plastic
Performance |
| Timeline |
| Transimex Transportation |
| Viet Thanh Plastic |
Transimex Transportation and Viet Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transimex Transportation and Viet Thanh
The main advantage of trading using opposite Transimex Transportation and Viet Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transimex Transportation position performs unexpectedly, Viet Thanh 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 Viet Thanh will offset losses from the drop in Viet Thanh's long position.The idea behind Transimex Transportation JSC and Viet Thanh Plastic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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