Correlation Between Truong Thanh and Development Investment
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Development Investment 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 Development Investment 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 Development Investment Construction, you can compare the effects of market volatilities on Truong Thanh and Development Investment 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 Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Development Investment.
Diversification Opportunities for Truong Thanh and Development Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Truong and Development is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Truong Thanh i.e., Truong Thanh and Development Investment go up and down completely randomly.
Pair Corralation between Truong Thanh and Development Investment
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to generate 0.97 times more return on investment than Development Investment. However, Truong Thanh Furniture is 1.03 times less risky than Development Investment. It trades about -0.26 of its potential returns per unit of risk. Development Investment Construction is currently generating about -0.32 per unit of risk. If you would invest 312,000 in Truong Thanh Furniture on January 19, 2025 and sell it today you would lose (58,000) from holding Truong Thanh Furniture or give up 18.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Development Investment Constru
Performance |
| Timeline |
| Truong Thanh Furniture |
| Development Investment |
Truong Thanh and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Development Investment
The main advantage of trading using opposite Truong Thanh and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh vs. Alphanam ME |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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