Correlation Between Ba Ria and Thien Long

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

By analyzing existing cross correlation between Ba Ria Thermal and Thien Long Group, you can compare the effects of market volatilities on Ba Ria and Thien Long 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 Ba Ria with a short position of Thien Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Thien Long.

Diversification Opportunities for Ba Ria and Thien Long

-0.83

Correlation Coefficient

Ba Ria  Thien Long

Pay attention - limited upside

The 3 months correlation between BTP and Thien is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and Thien Long Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thien Long Group and Ba Ria 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 Ba Ria Thermal are associated (or correlated) with Thien Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thien Long Group has no effect on the direction of Ba Ria i.e., Ba Ria and Thien Long go up and down completely randomly.

Pair Corralation between Ba Ria and Thien Long

Assuming the 90 days trading horizon Ba Ria is expected to generate 19.24 times less return on investment than Thien Long. But when comparing it to its historical volatility, Ba Ria Thermal is 2.14 times less risky than Thien Long. It trades about 0.04 of its potential returns per unit of risk. Thien Long Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  5,740,000  in Thien Long Group on September 21, 2024 and sell it today you would earn a total of  1,110,000  from holding Thien Long Group or generate 19.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ba Ria Thermal  vs.  Thien Long Group

Ba Ria Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ba Ria Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Thien Long Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thien Long Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Thien Long displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ba Ria and Thien Long

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

The idea behind Ba Ria Thermal and Thien Long Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.