Correlation Between Tah Hsin and Quang Viet

Can any of the company-specific risk be diversified away by investing in both Tah Hsin and Quang Viet 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 Tah Hsin and Quang Viet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tah Hsin Industrial and Quang Viet Enterprise, you can compare the effects of market volatilities on Tah Hsin and Quang Viet 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 Tah Hsin with a short position of Quang Viet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tah Hsin and Quang Viet.

Diversification Opportunities for Tah Hsin and Quang Viet

0.64

Correlation Coefficient

Tah Hsin  Quang Viet

Poor diversification

The 3 months correlation between Tah and Quang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tah Hsin Industrial and Quang Viet Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quang Viet Enterprise and Tah Hsin 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 Tah Hsin Industrial are associated (or correlated) with Quang Viet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quang Viet Enterprise has no effect on the direction of Tah Hsin i.e., Tah Hsin and Quang Viet go up and down completely randomly.

Pair Corralation between Tah Hsin and Quang Viet

Assuming the 90 days trading horizon Tah Hsin Industrial is expected to under-perform the Quang Viet. But the stock apears to be less risky and, when comparing its historical volatility, Tah Hsin Industrial is 2.36 times less risky than Quang Viet. The stock trades about -0.16 of its potential returns per unit of risk. The Quang Viet Enterprise is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9,930  in Quang Viet Enterprise on September 25, 2024 and sell it today you would earn a total of  40.00  from holding Quang Viet Enterprise or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Tah Hsin Industrial  vs.  Quang Viet Enterprise

Tah Hsin Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tah Hsin Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tah Hsin is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Quang Viet Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quang Viet Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Tah Hsin and Quang Viet

The main advantage of trading using opposite Tah Hsin and Quang Viet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tah Hsin position performs unexpectedly, Quang Viet 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 Quang Viet will offset losses from the drop in Quang Viet's long position.

The idea behind Tah Hsin Industrial and Quang Viet Enterprise pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.