Correlation Between Tien Phong and Duong Hieu

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

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

Diversification Opportunities for Tien Phong and Duong Hieu

-0.28

Correlation Coefficient

Tien Phong  Duong Hieu

Very good diversification

The 3 months correlation between Tien and Duong is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tien Phong Plastic and Duong Hieu Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duong Hieu Trading and Tien Phong 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 Tien Phong Plastic are associated (or correlated) with Duong Hieu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duong Hieu Trading has no effect on the direction of Tien Phong i.e., Tien Phong and Duong Hieu go up and down completely randomly.

Pair Corralation between Tien Phong and Duong Hieu

Assuming the 90 days trading horizon Tien Phong Plastic is expected to under-perform the Duong Hieu. But the stock apears to be less risky and, when comparing its historical volatility, Tien Phong Plastic is 1.32 times less risky than Duong Hieu. The stock trades about -0.05 of its potential returns per unit of risk. The Duong Hieu Trading is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  850,000  in Duong Hieu Trading on October 11, 2024 and sell it today you would earn a total of  20,000  from holding Duong Hieu Trading or generate 2.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Tien Phong Plastic  vs.  Duong Hieu Trading

Tien Phong Plastic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Phong Plastic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Tien Phong is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Duong Hieu Trading

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Duong Hieu Trading are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Duong Hieu is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tien Phong and Duong Hieu

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

The idea behind Tien Phong Plastic and Duong Hieu Trading 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.