Correlation Between Truong Thanh and Dong A
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Dong A 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 Dong A 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 Dong A Hotel, you can compare the effects of market volatilities on Truong Thanh and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Dong A.
Diversification Opportunities for Truong Thanh and Dong A
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Truong and Dong is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Truong Thanh i.e., Truong Thanh and Dong A go up and down completely randomly.
Pair Corralation between Truong Thanh and Dong A
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the Dong A. But the stock apears to be less risky and, when comparing its historical volatility, Truong Thanh Furniture is 2.05 times less risky than Dong A. The stock trades about -0.13 of its potential returns per unit of risk. The Dong A Hotel is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 342,000 in Dong A Hotel on November 8, 2024 and sell it today you would earn a total of 16,000 from holding Dong A Hotel or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Dong A Hotel
Performance |
| Timeline |
| Truong Thanh Furniture |
| Dong A Hotel |
Truong Thanh and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Dong A
The main advantage of trading using opposite Truong Thanh and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh vs. APG Securities Joint |
| Dong A vs. Bao Ngoc Investment | Dong A vs. Hcd Investment Producing | Dong A vs. Vincom Retail JSC | Dong A vs. FPT Digital Retail |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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