Correlation Between Tay Ninh and Thien Long

Can any of the company-specific risk be diversified away by investing in both Tay Ninh and Thien Long 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 Thien Long 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 Thien Long Group, you can compare the effects of market volatilities on Tay Ninh and Thien Long 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 Thien Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tay Ninh and Thien Long.

Diversification Opportunities for Tay Ninh and Thien Long

-0.16

Correlation Coefficient

Tay Ninh  Thien Long

Good diversification

The 3 months correlation between Tay and Thien is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tay Ninh Rubber and Thien Long Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thien Long Group 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 Thien Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thien Long Group has no effect on the direction of Tay Ninh i.e., Tay Ninh and Thien Long go up and down completely randomly.

Pair Corralation between Tay Ninh and Thien Long

Assuming the 90 days trading horizon Tay Ninh Rubber is expected to generate 1.45 times more return on investment than Thien Long. However, Tay Ninh is 1.45 times more volatile than Thien Long Group. It trades about 0.27 of its potential returns per unit of risk. Thien Long Group is currently generating about -0.14 per unit of risk. If you would invest  5,140,000  in Tay Ninh Rubber on December 21, 2024 and sell it today you would earn a total of  2,860,000  from holding Tay Ninh Rubber or generate 55.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Tay Ninh Rubber  vs.  Thien Long Group

Tay Ninh Rubber

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tay Ninh Rubber are ranked lower than 20 (%) 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.

Thien Long Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thien Long Group 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Tay Ninh and Thien Long

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

The idea behind Tay Ninh Rubber and Thien Long Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.