Correlation Between Tay Ninh and Phuoc Hoa
Can any of the company-specific risk be diversified away by investing in both Tay Ninh and Phuoc Hoa 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 Phuoc Hoa 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 Phuoc Hoa Rubber, you can compare the effects of market volatilities on Tay Ninh and Phuoc Hoa 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 Phuoc Hoa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Phuoc Hoa.
Diversification Opportunities for Tay Ninh and Phuoc Hoa
Good diversification
The 3 months correlation between Tay and Phuoc is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Phuoc Hoa Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phuoc Hoa Rubber 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 Phuoc Hoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phuoc Hoa Rubber has no effect on the direction of Tay Ninh i.e., Tay Ninh and Phuoc Hoa go up and down completely randomly.
Pair Corralation between Tay Ninh and Phuoc Hoa
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 1.11 times more return on investment than Phuoc Hoa. However, Tay Ninh is 1.11 times more volatile than Phuoc Hoa Rubber. It trades about 0.07 of its potential returns per unit of risk. Phuoc Hoa Rubber is currently generating about 0.03 per unit of risk. If you would invest 3,064,463 in Tay Ninh Rubber on October 16, 2024 and sell it today you would earn a total of 2,325,537 from holding Tay Ninh Rubber or generate 75.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Tay Ninh Rubber vs. Phuoc Hoa Rubber
Performance |
| Timeline |
| Tay Ninh Rubber |
| Phuoc Hoa Rubber |
Tay Ninh and Phuoc Hoa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Phuoc Hoa
The main advantage of trading using opposite Tay Ninh and Phuoc Hoa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh position performs unexpectedly, Phuoc Hoa 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 Phuoc Hoa will offset losses from the drop in Phuoc Hoa's long position.| Tay Ninh vs. VietinBank Securities JSC | Tay Ninh vs. Pacific Petroleum Transportation | Tay Ninh vs. Transport and Industry | Tay Ninh vs. DOMESCO Medical Import |
| Phuoc Hoa vs. Petrolimex Petrochemical JSC | Phuoc Hoa vs. Thong Nhat Rubber | Phuoc Hoa vs. Agriculture Printing and | Phuoc Hoa vs. Sao Vang Rubber |
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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