Correlation Between Truong Thanh and Pha Le
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Pha Le 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 Pha Le 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 Pha Le Plastics, you can compare the effects of market volatilities on Truong Thanh and Pha Le 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 Pha Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Pha Le.
Diversification Opportunities for Truong Thanh and Pha Le
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Truong and Pha is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Pha Le Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pha Le Plastics 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 Pha Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pha Le Plastics has no effect on the direction of Truong Thanh i.e., Truong Thanh and Pha Le go up and down completely randomly.
Pair Corralation between Truong Thanh and Pha Le
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the Pha Le. In addition to that, Truong Thanh is 1.06 times more volatile than Pha Le Plastics. It trades about -0.03 of its total potential returns per unit of risk. Pha Le Plastics is currently generating about 0.02 per unit of volatility. If you would invest 448,000 in Pha Le Plastics on October 16, 2024 and sell it today you would earn a total of 60,000 from holding Pha Le Plastics or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Pha Le Plastics
Performance |
| Timeline |
| Truong Thanh Furniture |
| Pha Le Plastics |
Truong Thanh and Pha Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Pha Le
The main advantage of trading using opposite Truong Thanh and Pha Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Pha Le 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 Le will offset losses from the drop in Pha Le's long position.| Truong Thanh vs. Pha Lai Thermal | Truong Thanh vs. Vincom Retail JSC | Truong Thanh vs. Dong A Hotel | Truong Thanh vs. Riverway Management JSC |
| Pha Le vs. Petrolimex Petrochemical JSC | Pha Le vs. Ducgiang Chemicals Detergent | Pha Le vs. Nafoods Group JSC | Pha Le 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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