Correlation Between Tay Ninh and South Books

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

By analyzing existing cross correlation between Tay Ninh Rubber and South Books Educational, you can compare the effects of market volatilities on Tay Ninh and South Books 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 Tay Ninh with a short position of South Books. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and South Books.

Diversification Opportunities for Tay Ninh and South Books

-0.61

Correlation Coefficient

Tay Ninh  South Books

Excellent diversification

The 3 months correlation between Tay and South is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and South Books Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Books Educational and Tay Ninh 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 Tay Ninh Rubber are associated (or correlated) with South Books. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Books Educational has no effect on the direction of Tay Ninh i.e., Tay Ninh and South Books go up and down completely randomly.

Pair Corralation between Tay Ninh and South Books

Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 0.57 times more return on investment than South Books. However, Tay Ninh Rubber is 1.75 times less risky than South Books. It trades about 0.28 of its potential returns per unit of risk. South Books Educational is currently generating about 0.09 per unit of risk. If you would invest  4,025,000  in Tay Ninh Rubber on October 6, 2024 and sell it today you would earn a total of  1,245,000  from holding Tay Ninh Rubber or generate 30.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	43.18%
Values	Daily Returns

Tay Ninh Rubber  vs.  South Books Educational

Tay Ninh Rubber

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tay Ninh Rubber are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Tay Ninh displayed solid returns over the last few months and may actually be approaching a breakup point.

South Books Educational

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in South Books Educational are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, South Books displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tay Ninh and South Books

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

The idea behind Tay Ninh Rubber and South Books Educational 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.