Correlation Between Tay Ninh and Pha Lai
Can any of the company-specific risk be diversified away by investing in both Tay Ninh and Pha Lai 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 Lai 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 Lai Thermal, you can compare the effects of market volatilities on Tay Ninh and Pha Lai 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 Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Pha Lai.
Diversification Opportunities for Tay Ninh and Pha Lai
Very good diversification
The 3 months correlation between Tay and Pha is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Pha Lai Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Lai Thermal 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 Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Lai Thermal has no effect on the direction of Tay Ninh i.e., Tay Ninh and Pha Lai go up and down completely randomly.
Pair Corralation between Tay Ninh and Pha Lai
Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 3.37 times more return on investment than Pha Lai. However, Tay Ninh is 3.37 times more volatile than Pha Lai Thermal. It trades about 0.36 of its potential returns per unit of risk. Pha Lai Thermal is currently generating about -0.01 per unit of risk. If you would invest 4,135,000 in Tay Ninh Rubber on October 26, 2024 and sell it today you would earn a total of 2,905,000 from holding Tay Ninh Rubber or generate 70.25% 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. Pha Lai Thermal
Performance |
| Timeline |
| Tay Ninh Rubber |
| Pha Lai Thermal |
Tay Ninh and Pha Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tay Ninh and Pha Lai
The main advantage of trading using opposite Tay Ninh and Pha Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tay Ninh position performs unexpectedly, Pha Lai 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 Lai will offset losses from the drop in Pha Lai's long position.| Tay Ninh vs. FIT INVEST JSC | Tay Ninh vs. Damsan JSC | Tay Ninh vs. An Phat Plastic | Tay Ninh vs. APG Securities Joint |
| Pha Lai vs. Post and Telecommunications | Pha Lai vs. Saigon Telecommunication Technologies | Pha Lai vs. Phuoc Hoa Rubber | Pha Lai vs. Tay Ninh 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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