Correlation Between Vietnam Technological and Thong Nhat

Can any of the company-specific risk be diversified away by investing in both Vietnam Technological and Thong Nhat 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 Vietnam Technological and Thong Nhat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vietnam Technological And and Thong Nhat Rubber, you can compare the effects of market volatilities on Vietnam Technological and Thong Nhat 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 Vietnam Technological with a short position of Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Technological and Thong Nhat.

Diversification Opportunities for Vietnam Technological and Thong Nhat

-0.28

Correlation Coefficient

Vietnam Technological  Thong Nhat

Very good diversification

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

Pair Corralation between Vietnam Technological and Thong Nhat

Assuming the 90 days trading horizon Vietnam Technological And is expected to generate 0.33 times more return on investment than Thong Nhat. However, Vietnam Technological And is 3.04 times less risky than Thong Nhat. It trades about 0.02 of its potential returns per unit of risk. Thong Nhat Rubber is currently generating about -0.02 per unit of risk. If you would invest  2,335,000  in Vietnam Technological And on October 7, 2024 and sell it today you would earn a total of  58,000  from holding Vietnam Technological And or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.35%
Values	Daily Returns

Vietnam Technological And  vs.  Thong Nhat Rubber

Vietnam Technological And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vietnam Technological And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Vietnam Technological is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Thong Nhat Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vietnam Technological and Thong Nhat

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

The idea behind Vietnam Technological And and Thong Nhat Rubber 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.