Correlation Between Tay Ninh and Pha Le
Can any of the company-specific risk be diversified away by investing in both Tay Ninh and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Tay Ninh and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Pha Le.
Diversification Opportunities for Tay Ninh and Pha Le
Very weak diversification
The 3 months correlation between Tay and Pha is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Tay Ninh i.e., Tay Ninh and Pha Le go up and down completely randomly.
Pair Corralation between Tay Ninh and Pha Le
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 1.06 times more return on investment than Pha Le. However, Tay Ninh is 1.06 times more volatile than Pha Le Plastics. It trades about 0.11 of its potential returns per unit of risk. Pha Le Plastics is currently generating about 0.02 per unit of risk. If you would invest 2,903,175 in Tay Ninh Rubber on October 30, 2024 and sell it today you would earn a total of 4,126,825 from holding Tay Ninh Rubber or generate 142.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.11% |
| Values | Daily Returns |
Tay Ninh Rubber vs. Pha Le Plastics
Performance |
| Timeline |
| Tay Ninh Rubber |
| Pha Le Plastics |
Tay Ninh and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Pha Le
The main advantage of trading using opposite Tay Ninh and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh position performs unexpectedly, Pha Le 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 Pha Le will offset losses from the drop in Pha Le's long position.| Tay Ninh vs. Truong Thanh Furniture | Tay Ninh vs. Nam Kim Steel | Tay Ninh vs. Vinhomes JSC | Tay Ninh vs. Post and Telecommunications |
| Pha Le vs. Japan Vietnam Medical | Pha Le vs. Hanoi Plastics JSC | Pha Le vs. An Phat Plastic | Pha Le vs. Tien Phong Plastic |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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