Correlation Between Truong Thanh and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Binh Duong 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 Truong Thanh and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truong Thanh Furniture and Binh Duong Construction, you can compare the effects of market volatilities on Truong Thanh and Binh Duong 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 Truong Thanh with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Binh Duong.
Diversification Opportunities for Truong Thanh and Binh Duong
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Truong and Binh is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Binh Duong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Construction and Truong Thanh 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 Truong Thanh Furniture are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Construction has no effect on the direction of Truong Thanh i.e., Truong Thanh and Binh Duong go up and down completely randomly.
Pair Corralation between Truong Thanh and Binh Duong
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the Binh Duong. But the stock apears to be less risky and, when comparing its historical volatility, Truong Thanh Furniture is 1.68 times less risky than Binh Duong. The stock trades about -0.3 of its potential returns per unit of risk. The Binh Duong Construction is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 830,000 in Binh Duong Construction on October 29, 2024 and sell it today you would earn a total of 120,000 from holding Binh Duong Construction or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Binh Duong Construction
Performance |
| Timeline |
| Truong Thanh Furniture |
| Binh Duong Construction |
Truong Thanh and Binh Duong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Binh Duong
The main advantage of trading using opposite Truong Thanh and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.| Truong Thanh vs. Nam Kim Steel | Truong Thanh vs. Fecon Mining JSC | Truong Thanh vs. Bao Ngoc Investment | Truong Thanh vs. Vu Dang Investment |
| Binh Duong vs. Dinhvu Port Investment | Binh Duong vs. Construction And Investment | Binh Duong vs. Vinhomes JSC | Binh Duong vs. Thanh Dat Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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