Correlation Between Tin Nghia and Dinhvu Port

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

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

Diversification Opportunities for Tin Nghia and Dinhvu Port

-0.11

Correlation Coefficient

Tin Nghia  Dinhvu Port

Good diversification

The 3 months correlation between Tin and Dinhvu is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and Dinhvu Port Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dinhvu Port Investment and Tin Nghia 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 Tin Nghia Industrial are associated (or correlated) with Dinhvu Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dinhvu Port Investment has no effect on the direction of Tin Nghia i.e., Tin Nghia and Dinhvu Port go up and down completely randomly.

Pair Corralation between Tin Nghia and Dinhvu Port

Assuming the 90 days trading horizon Tin Nghia Industrial is expected to under-perform the Dinhvu Port. In addition to that, Tin Nghia is 1.78 times more volatile than Dinhvu Port Investment. It trades about -0.03 of its total potential returns per unit of risk. Dinhvu Port Investment is currently generating about 0.2 per unit of volatility. If you would invest  7,600,000  in Dinhvu Port Investment on October 24, 2024 and sell it today you would earn a total of  950,000  from holding Dinhvu Port Investment or generate 12.5% return on investment over 90 days.

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

Tin Nghia Industrial  vs.  Dinhvu Port Investment

Tin Nghia Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dinhvu Port Investment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dinhvu Port Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dinhvu Port may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Tin Nghia and Dinhvu Port

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

The idea behind Tin Nghia Industrial and Dinhvu Port Investment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.