Correlation Between Truong Thanh and Thu Duc
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Thu Duc 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 Thu Duc 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 Thu Duc TradingImport, you can compare the effects of market volatilities on Truong Thanh and Thu Duc 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 Thu Duc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Thu Duc.
Diversification Opportunities for Truong Thanh and Thu Duc
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Truong and Thu is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Thu Duc TradingImport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thu Duc TradingImport 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 Thu Duc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thu Duc TradingImport has no effect on the direction of Truong Thanh i.e., Truong Thanh and Thu Duc go up and down completely randomly.
Pair Corralation between Truong Thanh and Thu Duc
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to generate 0.37 times more return on investment than Thu Duc. However, Truong Thanh Furniture is 2.68 times less risky than Thu Duc. It trades about -0.3 of its potential returns per unit of risk. Thu Duc TradingImport is currently generating about -0.35 per unit of risk. If you would invest 320,000 in Truong Thanh Furniture on October 30, 2024 and sell it today you would lose (18,000) from holding Truong Thanh Furniture or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Thu Duc TradingImport
Performance |
| Timeline |
| Truong Thanh Furniture |
| Thu Duc TradingImport |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Truong Thanh and Thu Duc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Thu Duc
The main advantage of trading using opposite Truong Thanh and Thu Duc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Thu Duc 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 Thu Duc will offset losses from the drop in Thu Duc's long position.| Truong Thanh vs. Asia Commercial Bank | Truong Thanh vs. Elcom Technology Communications | Truong Thanh vs. Hanoi Beer Alcohol | Truong Thanh vs. Military Insurance Corp |
| Thu Duc vs. Ba Ria Thermal | Thu Duc vs. CEO Group JSC | Thu Duc vs. Pha Le Plastics | Thu Duc vs. Tay Ninh Rubber |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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