Correlation Between Thanh Dat and Vietnam Technological

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

Diversification Opportunities for Thanh Dat and Vietnam Technological

-0.71

Correlation Coefficient

Thanh Dat  Vietnam Technological

Pay attention - limited upside

The 3 months correlation between Thanh and Vietnam is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Dat Investment and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And 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 Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Thanh Dat i.e., Thanh Dat and Vietnam Technological go up and down completely randomly.

Pair Corralation between Thanh Dat and Vietnam Technological

Assuming the 90 days trading horizon Thanh Dat Investment is expected to under-perform the Vietnam Technological. In addition to that, Thanh Dat is 1.31 times more volatile than Vietnam Technological And. It trades about -0.17 of its total potential returns per unit of risk. Vietnam Technological And is currently generating about 0.19 per unit of volatility. If you would invest  2,390,000  in Vietnam Technological And on December 21, 2024 and sell it today you would earn a total of  355,000  from holding Vietnam Technological And or generate 14.85% return on investment over 90 days.

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

Thanh Dat Investment  vs.  Vietnam Technological And

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.

Vietnam Technological And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Technological And are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Vietnam Technological displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thanh Dat and Vietnam Technological

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

The idea behind Thanh Dat Investment and Vietnam Technological And 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.