Correlation Between Thanh Dat and Joint Stock

Can any of the company-specific risk be diversified away by investing in both Thanh Dat and Joint Stock 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 Joint Stock 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 Joint Stock Commercial, you can compare the effects of market volatilities on Thanh Dat and Joint Stock 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 Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Dat and Joint Stock.

Diversification Opportunities for Thanh Dat and Joint Stock

-0.65

Correlation Coefficient

Thanh Dat  Joint Stock

Excellent diversification

The 3 months correlation between Thanh and Joint is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Joint Stock Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock Commercial 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock Commercial has no effect on the direction of Thanh Dat i.e., Thanh Dat and Joint Stock go up and down completely randomly.

Pair Corralation between Thanh Dat and Joint Stock

Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 0.85 times more return on investment than Joint Stock. However, Thanh Dat Investment is 1.18 times less risky than Joint Stock. It trades about 0.03 of its potential returns per unit of risk. Joint Stock Commercial is currently generating about -0.11 per unit of risk. If you would invest  2,520,000  in Thanh Dat Investment on October 11, 2024 and sell it today you would earn a total of  70,000  from holding Thanh Dat Investment or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Thanh Dat Investment  vs.  Joint Stock Commercial

Thanh Dat Investment

Risk-Adjusted Performance

2 of 100

Weak

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 recent stock price disarray, may contribute to short-term losses for the investors.

Joint Stock Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock Commercial 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 fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Thanh Dat and Joint Stock

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

The idea behind Thanh Dat Investment and Joint Stock Commercial 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.