Correlation Between Tien Giang and HNX

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

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

Diversification Opportunities for Tien Giang and HNX

0.73

Correlation Coefficient

Tien Giang  HNX

Poor diversification

The 3 months correlation between Tien and HNX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and HNX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNX and Tien Giang 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 Giang Investment are associated (or correlated) with HNX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNX has no effect on the direction of Tien Giang i.e., Tien Giang and HNX go up and down completely randomly.

Pair Corralation between Tien Giang and HNX

Assuming the 90 days trading horizon Tien Giang Investment is expected to generate 3.76 times more return on investment than HNX. However, Tien Giang is 3.76 times more volatile than HNX. It trades about 0.21 of its potential returns per unit of risk. HNX is currently generating about 0.21 per unit of risk. If you would invest  4,474,167  in Tien Giang Investment on December 21, 2024 and sell it today you would earn a total of  1,295,833  from holding Tien Giang Investment or generate 28.96% return on investment over 90 days.

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

Tien Giang Investment  vs.  HNX

Pair Trading with Tien Giang and HNX

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

The idea behind Tien Giang Investment and HNX 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.