Correlation Between Truong Thanh and Investment

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

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

Diversification Opportunities for Truong Thanh and Investment

-0.12

Correlation Coefficient

Truong Thanh  Investment

Good diversification

The 3 months correlation between Truong and Investment is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Investment And Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment And Const and Truong Thanh 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 Truong Thanh Furniture are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment And Const has no effect on the direction of Truong Thanh i.e., Truong Thanh and Investment go up and down completely randomly.

Pair Corralation between Truong Thanh and Investment

Assuming the 90 days trading horizon Truong Thanh Furniture is expected to generate 0.47 times more return on investment than Investment. However, Truong Thanh Furniture is 2.14 times less risky than Investment. It trades about 0.01 of its potential returns per unit of risk. Investment And Construction is currently generating about -0.05 per unit of risk. If you would invest  308,000  in Truong Thanh Furniture on October 12, 2024 and sell it today you would earn a total of  1,000.00  from holding Truong Thanh Furniture or generate 0.32% return on investment over 90 days.

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

Truong Thanh Furniture  vs.  Investment And Construction

Truong Thanh Furniture

Risk-Adjusted Performance

0 of 100

Weak

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

Investment And Const

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment And Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Truong Thanh and Investment

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

The idea behind Truong Thanh Furniture and Investment And Construction 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.