Correlation Between DIC Holdings and Tien Phong

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

By analyzing existing cross correlation between DIC Holdings Construction and Tien Phong Plastic, you can compare the effects of market volatilities on DIC Holdings and Tien Phong 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 DIC Holdings with a short position of Tien Phong. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIC Holdings and Tien Phong.

Diversification Opportunities for DIC Holdings and Tien Phong

0.87

Correlation Coefficient

DIC Holdings  Tien Phong

Very poor diversification

The 3 months correlation between DIC and Tien is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding DIC Holdings Construction and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic and DIC Holdings 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 DIC Holdings Construction are associated (or correlated) with Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of DIC Holdings i.e., DIC Holdings and Tien Phong go up and down completely randomly.

Pair Corralation between DIC Holdings and Tien Phong

Assuming the 90 days trading horizon DIC Holdings Construction is expected to generate 1.4 times more return on investment than Tien Phong. However, DIC Holdings is 1.4 times more volatile than Tien Phong Plastic. It trades about 0.1 of its potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.09 per unit of risk. If you would invest  1,233,930  in DIC Holdings Construction on December 28, 2024 and sell it today you would earn a total of  166,070  from holding DIC Holdings Construction or generate 13.46% return on investment over 90 days.

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

DIC Holdings Construction  vs.  Tien Phong Plastic

DIC Holdings Construction

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DIC Holdings Construction are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIC Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Tien Phong Plastic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Phong Plastic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tien Phong may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DIC Holdings and Tien Phong

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

The idea behind DIC Holdings Construction and Tien Phong Plastic 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.