Correlation Between Investment and Duc Thanh

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

By analyzing existing cross correlation between Investment and Industrial and Duc Thanh Wood, you can compare the effects of market volatilities on Investment and Duc 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 Investment with a short position of Duc Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Duc Thanh.

Diversification Opportunities for Investment and Duc Thanh

-0.47

Correlation Coefficient

Investment  Duc Thanh

Very good diversification

The 3 months correlation between Investment and Duc is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and Duc Thanh Wood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duc Thanh Wood and Investment 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 Investment and Industrial are associated (or correlated) with Duc Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duc Thanh Wood has no effect on the direction of Investment i.e., Investment and Duc Thanh go up and down completely randomly.

Pair Corralation between Investment and Duc Thanh

Assuming the 90 days trading horizon Investment and Industrial is expected to generate 1.48 times more return on investment than Duc Thanh. However, Investment is 1.48 times more volatile than Duc Thanh Wood. It trades about 0.12 of its potential returns per unit of risk. Duc Thanh Wood is currently generating about -0.23 per unit of risk. If you would invest  6,980,000  in Investment and Industrial on December 29, 2024 and sell it today you would earn a total of  780,000  from holding Investment and Industrial or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Investment and Industrial  vs.  Duc Thanh Wood

Investment and Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investment and Industrial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Duc Thanh Wood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duc Thanh Wood has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Investment and Duc Thanh

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

The idea behind Investment and Industrial and Duc Thanh Wood 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.