Correlation Between Thu Duc and Vietnam Technological

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

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

Diversification Opportunities for Thu Duc and Vietnam Technological

-0.15

Correlation Coefficient

Thu Duc  Vietnam Technological

Good diversification

The 3 months correlation between Thu and Vietnam is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Thu Duc TradingImport and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And and Thu Duc 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 Thu Duc TradingImport are associated (or correlated) with Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Thu Duc i.e., Thu Duc and Vietnam Technological go up and down completely randomly.

Pair Corralation between Thu Duc and Vietnam Technological

Assuming the 90 days trading horizon Thu Duc TradingImport is expected to generate 1.68 times more return on investment than Vietnam Technological. However, Thu Duc is 1.68 times more volatile than Vietnam Technological And. It trades about 0.32 of its potential returns per unit of risk. Vietnam Technological And is currently generating about 0.01 per unit of risk. If you would invest  770,000  in Thu Duc TradingImport on October 7, 2024 and sell it today you would earn a total of  100,000  from holding Thu Duc TradingImport or generate 12.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.49%
Values	Daily Returns

Thu Duc TradingImport  vs.  Vietnam Technological And

Thu Duc TradingImport

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Thu Duc TradingImport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak fundamental indicators, Thu Duc displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Thu Duc and Vietnam Technological

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

The idea behind Thu Duc TradingImport and Vietnam Technological And 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.