Correlation Between Tay Ninh and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Tay Ninh and Ducgiang Chemicals 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 Tay Ninh and Ducgiang Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tay Ninh Rubber and Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Tay Ninh and Ducgiang Chemicals 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 Tay Ninh with a short position of Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Ducgiang Chemicals.
Diversification Opportunities for Tay Ninh and Ducgiang Chemicals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tay and Ducgiang is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals and Tay Ninh 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 Tay Ninh Rubber are associated (or correlated) with Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Tay Ninh i.e., Tay Ninh and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Tay Ninh and Ducgiang Chemicals
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 1.53 times more return on investment than Ducgiang Chemicals. However, Tay Ninh is 1.53 times more volatile than Ducgiang Chemicals Detergent. It trades about 0.14 of its potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about 0.06 per unit of risk. If you would invest 3,930,000 in Tay Ninh Rubber on August 29, 2024 and sell it today you would earn a total of 675,000 from holding Tay Ninh Rubber or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tay Ninh Rubber vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Tay Ninh Rubber |
| Ducgiang Chemicals |
Tay Ninh and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Ducgiang Chemicals
The main advantage of trading using opposite Tay Ninh and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Tay Ninh vs. FIT INVEST JSC | Tay Ninh vs. Damsan JSC | Tay Ninh vs. An Phat Plastic | Tay Ninh vs. Alphanam ME |
| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals vs. Alphanam ME |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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