Correlation Between Tri Viet and Dong A
Can any of the company-specific risk be diversified away by investing in both Tri Viet and Dong A 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 Tri Viet and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tri Viet Management and Dong A Hotel, you can compare the effects of market volatilities on Tri Viet and Dong A 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 Tri Viet with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Viet and Dong A.
Diversification Opportunities for Tri Viet and Dong A
Very good diversification
The 3 months correlation between Tri and Dong is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tri Viet Management and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and Tri Viet 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 Tri Viet Management are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Tri Viet i.e., Tri Viet and Dong A go up and down completely randomly.
Pair Corralation between Tri Viet and Dong A
Assuming the 90 days trading horizon Tri Viet Management is expected to generate 1.56 times more return on investment than Dong A. However, Tri Viet is 1.56 times more volatile than Dong A Hotel. It trades about 0.07 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.04 per unit of risk. If you would invest 660,000 in Tri Viet Management on December 12, 2024 and sell it today you would earn a total of 300,000 from holding Tri Viet Management or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.41% |
| Values | Daily Returns |
Tri Viet Management vs. Dong A Hotel
Performance |
| Timeline |
| Tri Viet Management |
| Dong A Hotel |
Tri Viet and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tri Viet and Dong A
The main advantage of trading using opposite Tri Viet and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri Viet position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Tri Viet vs. Ha Noi Education | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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