Correlation Between Mobile World and Tien Phong

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

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

Diversification Opportunities for Mobile World and Tien Phong

-0.1

Correlation Coefficient

Mobile World  Tien Phong

Good diversification

The 3 months correlation between Mobile and Tien is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mobile World Investment and Tien Phong Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Phong Plastic and Mobile World 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 Mobile World Investment are associated (or correlated) with Tien Phong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Phong Plastic has no effect on the direction of Mobile World i.e., Mobile World and Tien Phong go up and down completely randomly.

Pair Corralation between Mobile World and Tien Phong

Assuming the 90 days trading horizon Mobile World is expected to generate 2.52 times less return on investment than Tien Phong. But when comparing it to its historical volatility, Mobile World Investment is 1.07 times less risky than Tien Phong. It trades about 0.04 of its potential returns per unit of risk. Tien Phong Plastic is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,791,198  in Tien Phong Plastic on September 28, 2024 and sell it today you would earn a total of  3,738,802  from holding Tien Phong Plastic or generate 133.95% return on investment over 90 days.

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

Mobile World Investment  vs.  Tien Phong Plastic

Mobile World Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile World Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Tien Phong Plastic

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Phong Plastic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tien Phong may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mobile World and Tien Phong

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

The idea behind Mobile World Investment and Tien Phong Plastic 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.