Correlation Between Thanh Dat and AgriBank Securities

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

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

Diversification Opportunities for Thanh Dat and AgriBank Securities

-0.35

Correlation Coefficient

Thanh Dat  AgriBank Securities

Very good diversification

The 3 months correlation between Thanh and AgriBank is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Thanh Dat 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 Thanh Dat Investment are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Thanh Dat i.e., Thanh Dat and AgriBank Securities go up and down completely randomly.

Pair Corralation between Thanh Dat and AgriBank Securities

Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 2.06 times more return on investment than AgriBank Securities. However, Thanh Dat is 2.06 times more volatile than AgriBank Securities JSC. It trades about -0.14 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about -0.47 per unit of risk. If you would invest  2,730,000  in Thanh Dat Investment on October 10, 2024 and sell it today you would lose (140,000) from holding Thanh Dat Investment or give up 5.13% of portfolio value over 90 days.

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

Thanh Dat Investment  vs.  AgriBank Securities JSC

Thanh Dat Investment

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thanh Dat Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Thanh Dat is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AgriBank Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgriBank Securities JSC 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.

Pair Trading with Thanh Dat and AgriBank Securities

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

The idea behind Thanh Dat Investment and AgriBank Securities 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.