Correlation Between Truong Thanh and POST TELECOMMU
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and POST TELECOMMU 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 POST TELECOMMU 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 POST TELECOMMU, you can compare the effects of market volatilities on Truong Thanh and POST TELECOMMU 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 POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and POST TELECOMMU.
Diversification Opportunities for Truong Thanh and POST TELECOMMU
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truong and POST is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU 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 POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of Truong Thanh i.e., Truong Thanh and POST TELECOMMU go up and down completely randomly.
Pair Corralation between Truong Thanh and POST TELECOMMU
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the POST TELECOMMU. But the stock apears to be less risky and, when comparing its historical volatility, Truong Thanh Furniture is 2.72 times less risky than POST TELECOMMU. The stock trades about -0.06 of its potential returns per unit of risk. The POST TELECOMMU is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,080,000 in POST TELECOMMU on September 15, 2024 and sell it today you would earn a total of 100,000 from holding POST TELECOMMU or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Truong Thanh Furniture vs. POST TELECOMMU
Performance |
| Timeline |
| Truong Thanh Furniture |
| POST TELECOMMU |
Truong Thanh and POST TELECOMMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and POST TELECOMMU
The main advantage of trading using opposite Truong Thanh and POST TELECOMMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, POST TELECOMMU 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 POST TELECOMMU will offset losses from the drop in POST TELECOMMU'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 |
| POST TELECOMMU vs. Truong Thanh Furniture | POST TELECOMMU vs. Hanoi Plastics JSC | POST TELECOMMU vs. Pacific Petroleum Transportation | POST TELECOMMU vs. Saigon Beer Alcohol |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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