Correlation Between Da Nang and Tien Giang

Can any of the company-specific risk be diversified away by investing in both Da Nang and Tien Giang 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 Da Nang and Tien Giang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Da Nang Construction and Tien Giang Investment, you can compare the effects of market volatilities on Da Nang and Tien Giang 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 Da Nang with a short position of Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Nang and Tien Giang.

Diversification Opportunities for Da Nang and Tien Giang

0.08

Correlation Coefficient

Da Nang  Tien Giang

Significant diversification

The 3 months correlation between DXV and Tien is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Da Nang Construction and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang Investment and Da Nang 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 Da Nang Construction are associated (or correlated) with Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Da Nang i.e., Da Nang and Tien Giang go up and down completely randomly.

Pair Corralation between Da Nang and Tien Giang

Assuming the 90 days trading horizon Da Nang is expected to generate 6.18 times less return on investment than Tien Giang. In addition to that, Da Nang is 2.46 times more volatile than Tien Giang Investment. It trades about 0.01 of its total potential returns per unit of risk. Tien Giang Investment is currently generating about 0.1 per unit of volatility. If you would invest  2,986,790  in Tien Giang Investment on October 26, 2024 and sell it today you would earn a total of  2,463,210  from holding Tien Giang Investment or generate 82.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Da Nang Construction  vs.  Tien Giang Investment

Da Nang Construction

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Da Nang Construction are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Da Nang may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tien Giang Investment

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Giang Investment are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tien Giang displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Da Nang and Tien Giang

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

The idea behind Da Nang Construction and Tien Giang Investment 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.