Correlation Between Thanh Dat and Educational Book

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

Diversification Opportunities for Thanh Dat and Educational Book

0.04

Correlation Coefficient

Thanh Dat  Educational Book

Significant diversification

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

Pair Corralation between Thanh Dat and Educational Book

Assuming the 90 days trading horizon Thanh Dat Investment is expected to generate 0.73 times more return on investment than Educational Book. However, Thanh Dat Investment is 1.37 times less risky than Educational Book. It trades about 0.02 of its potential returns per unit of risk. Educational Book In is currently generating about 0.01 per unit of risk. If you would invest  2,245,747  in Thanh Dat Investment on October 23, 2024 and sell it today you would earn a total of  254,253  from holding Thanh Dat Investment or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.69%
Values	Daily Returns

Thanh Dat Investment  vs.  Educational Book In

Thanh Dat Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thanh Dat Investment are ranked lower than 1 (%) 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.

Educational Book

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Educational Book In has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Educational Book is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Thanh Dat and Educational Book

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

The idea behind Thanh Dat Investment and Educational Book In 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.