Correlation Between Truong Thanh and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Tin Nghia 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 Tin Nghia 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 Tin Nghia Industrial, you can compare the effects of market volatilities on Truong Thanh and Tin Nghia 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 Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Tin Nghia.
Diversification Opportunities for Truong Thanh and Tin Nghia
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Truong and Tin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial 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 Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Truong Thanh i.e., Truong Thanh and Tin Nghia go up and down completely randomly.
Pair Corralation between Truong Thanh and Tin Nghia
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to generate 3.05 times more return on investment than Tin Nghia. However, Truong Thanh is 3.05 times more volatile than Tin Nghia Industrial. It trades about -0.01 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.24 per unit of risk. If you would invest 305,000 in Truong Thanh Furniture on October 22, 2024 and sell it today you would lose (2,000) from holding Truong Thanh Furniture or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Tin Nghia Industrial
Performance |
| Timeline |
| Truong Thanh Furniture |
| Tin Nghia Industrial |
Truong Thanh and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Tin Nghia
The main advantage of trading using opposite Truong Thanh and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Truong Thanh vs. Binh Duong Construction | Truong Thanh vs. DIC Holdings Construction | Truong Thanh vs. Saigon Beer Alcohol | Truong Thanh vs. Mechanics Construction and |
| Tin Nghia vs. Military Insurance Corp | Tin Nghia vs. Truong Thanh Furniture | Tin Nghia vs. Pha Le Plastics | Tin Nghia vs. Saigon Telecommunication Technologies |
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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