Correlation Between Thanh Dat and Ho Chi

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

Diversification Opportunities for Thanh Dat and Ho Chi

0.51

Correlation Coefficient

Thanh Dat  Ho Chi

Very weak diversification

The 3 months correlation between Thanh and HDB is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Ho Chi Minh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ho Chi Minh 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 Ho Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ho Chi Minh has no effect on the direction of Thanh Dat i.e., Thanh Dat and Ho Chi go up and down completely randomly.

Pair Corralation between Thanh Dat and Ho Chi

Assuming the 90 days trading horizon Thanh Dat Investment is expected to under-perform the Ho Chi. But the stock apears to be less risky and, when comparing its historical volatility, Thanh Dat Investment is 1.09 times less risky than Ho Chi. The stock trades about -0.13 of its potential returns per unit of risk. The Ho Chi Minh is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,340,000  in Ho Chi Minh on December 20, 2024 and sell it today you would lose (35,000) from holding Ho Chi Minh or give up 1.5% of portfolio value over 90 days.

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

Thanh Dat Investment  vs.  Ho Chi Minh

Thanh Dat Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thanh Dat Investment 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ho Chi Minh

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ho Chi Minh has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Ho Chi 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 Ho Chi

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

The idea behind Thanh Dat Investment and Ho Chi Minh 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..