Correlation Between Truong Thanh and Danang Rubber
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Danang Rubber 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 Danang Rubber 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 Danang Rubber JSC, you can compare the effects of market volatilities on Truong Thanh and Danang Rubber 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 Danang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Danang Rubber.
Diversification Opportunities for Truong Thanh and Danang Rubber
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Truong and Danang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Danang Rubber JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Rubber JSC 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 Danang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Rubber JSC has no effect on the direction of Truong Thanh i.e., Truong Thanh and Danang Rubber go up and down completely randomly.
Pair Corralation between Truong Thanh and Danang Rubber
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the Danang Rubber. In addition to that, Truong Thanh is 1.12 times more volatile than Danang Rubber JSC. It trades about -0.03 of its total potential returns per unit of risk. Danang Rubber JSC is currently generating about 0.05 per unit of volatility. If you would invest 1,892,977 in Danang Rubber JSC on September 3, 2024 and sell it today you would earn a total of 962,023 from holding Danang Rubber JSC or generate 50.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Danang Rubber JSC
Performance |
| Timeline |
| Truong Thanh Furniture |
| Danang Rubber JSC |
Truong Thanh and Danang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Danang Rubber
The main advantage of trading using opposite Truong Thanh and Danang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Danang Rubber 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 Danang Rubber will offset losses from the drop in Danang Rubber's long position.| Truong Thanh vs. South Basic Chemicals | Truong Thanh vs. PetroVietnam Drilling Well | Truong Thanh vs. LDG Investment JSC | Truong Thanh vs. TDG Global Investment |
| Danang Rubber vs. VTC Telecommunications JSC | Danang Rubber vs. Hochiminh City Metal | Danang Rubber vs. Hanoi Beer Alcohol | Danang Rubber vs. Truong Thanh Furniture |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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