Correlation Between TDG Global and Duong Hieu

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

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

Diversification Opportunities for TDG Global and Duong Hieu

0.32

Correlation Coefficient

TDG Global  Duong Hieu

Weak diversification

The 3 months correlation between TDG and Duong is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TDG Global Investment 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 TDG Global 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 TDG Global Investment 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 TDG Global i.e., TDG Global and Duong Hieu go up and down completely randomly.

Pair Corralation between TDG Global and Duong Hieu

Assuming the 90 days trading horizon TDG Global Investment is expected to under-perform the Duong Hieu. But the stock apears to be less risky and, when comparing its historical volatility, TDG Global Investment is 1.93 times less risky than Duong Hieu. The stock trades about -0.16 of its potential returns per unit of risk. The Duong Hieu Trading is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  860,000  in Duong Hieu Trading on October 20, 2024 and sell it today you would lose (46,000) from holding Duong Hieu Trading or give up 5.35% of portfolio value over 90 days.

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

TDG Global Investment  vs.  Duong Hieu Trading

TDG Global Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TDG Global 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Duong Hieu Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duong Hieu Trading has generated negative risk-adjusted returns adding no value to investors with long positions. 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 TDG Global and Duong Hieu

The main advantage of trading using opposite TDG Global and Duong Hieu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDG Global 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 TDG Global Investment 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.