Correlation Between Travel Investment and Ngan Son

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

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

Diversification Opportunities for Travel Investment and Ngan Son

0.04

Correlation Coefficient

Travel Investment  Ngan Son

Significant diversification

The 3 months correlation between Travel and Ngan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Travel Investment and and Ngan Son JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngan Son JSC and Travel 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 Travel Investment and are associated (or correlated) with Ngan Son. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngan Son JSC has no effect on the direction of Travel Investment i.e., Travel Investment and Ngan Son go up and down completely randomly.

Pair Corralation between Travel Investment and Ngan Son

Assuming the 90 days trading horizon Travel Investment is expected to generate 1.67 times less return on investment than Ngan Son. But when comparing it to its historical volatility, Travel Investment and is 1.02 times less risky than Ngan Son. It trades about 0.07 of its potential returns per unit of risk. Ngan Son JSC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,000,000  in Ngan Son JSC on December 21, 2024 and sell it today you would earn a total of  120,000  from holding Ngan Son JSC or generate 12.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	87.18%
Values	Daily Returns

Travel Investment and  vs.  Ngan Son JSC

Travel Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Travel Investment and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Travel Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ngan Son JSC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ngan Son JSC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ngan Son displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Travel Investment and Ngan Son

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

The idea behind Travel Investment and and Ngan Son JSC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..