Correlation Between Viet Thanh and Truong Thanh
Can any of the company-specific risk be diversified away by investing in both Viet Thanh and Truong Thanh 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 Viet Thanh and Truong Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Truong Thanh Furniture, you can compare the effects of market volatilities on Viet Thanh and Truong Thanh 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 Viet Thanh with a short position of Truong Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Truong Thanh.
Diversification Opportunities for Viet Thanh and Truong Thanh
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Viet and Truong is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Truong Thanh Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truong Thanh Furniture and Viet 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 Viet Thanh Plastic are associated (or correlated) with Truong Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truong Thanh Furniture has no effect on the direction of Viet Thanh i.e., Viet Thanh and Truong Thanh go up and down completely randomly.
Pair Corralation between Viet Thanh and Truong Thanh
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to under-perform the Truong Thanh. But the stock apears to be less risky and, when comparing its historical volatility, Viet Thanh Plastic is 1.58 times less risky than Truong Thanh. The stock trades about -0.13 of its potential returns per unit of risk. The Truong Thanh Furniture is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 309,000 in Truong Thanh Furniture on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Truong Thanh Furniture or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Truong Thanh Furniture
Performance |
| Timeline |
| Viet Thanh Plastic |
| Truong Thanh Furniture |
Viet Thanh and Truong Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Truong Thanh
The main advantage of trading using opposite Viet Thanh and Truong Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh position performs unexpectedly, Truong Thanh 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 Truong Thanh will offset losses from the drop in Truong Thanh's long position.| Viet Thanh vs. Danang Education Investment | Viet Thanh vs. Techno Agricultural Supplying | Viet Thanh vs. Dinhvu Port Investment | Viet Thanh vs. Petrovietnam Technical Services |
| Truong Thanh vs. Thong Nhat Rubber | Truong Thanh vs. VTC Telecommunications JSC | Truong Thanh vs. Viet Thanh Plastic | Truong Thanh vs. Dong A Hotel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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