Correlation Between Picomat Plastic and Thong Nhat

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

By analyzing existing cross correlation between Picomat Plastic JSC and Thong Nhat JSC, you can compare the effects of market volatilities on Picomat Plastic and Thong Nhat 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 Picomat Plastic with a short position of Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picomat Plastic and Thong Nhat.

Diversification Opportunities for Picomat Plastic and Thong Nhat

0.09

Correlation Coefficient

Picomat Plastic  Thong Nhat

Significant diversification

The 3 months correlation between Picomat and Thong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Picomat Plastic JSC and Thong Nhat JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thong Nhat JSC and Picomat Plastic 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 Picomat Plastic JSC are associated (or correlated) with Thong Nhat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thong Nhat JSC has no effect on the direction of Picomat Plastic i.e., Picomat Plastic and Thong Nhat go up and down completely randomly.

Pair Corralation between Picomat Plastic and Thong Nhat

Assuming the 90 days trading horizon Picomat Plastic is expected to generate 2.27 times less return on investment than Thong Nhat. But when comparing it to its historical volatility, Picomat Plastic JSC is 1.85 times less risky than Thong Nhat. It trades about 0.08 of its potential returns per unit of risk. Thong Nhat JSC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,666,229  in Thong Nhat JSC on September 29, 2024 and sell it today you would earn a total of  433,771  from holding Thong Nhat JSC or generate 11.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Picomat Plastic JSC  vs.  Thong Nhat JSC

Picomat Plastic JSC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Picomat Plastic JSC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Picomat Plastic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Thong Nhat JSC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thong Nhat JSC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Thong Nhat displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Picomat Plastic and Thong Nhat

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

The idea behind Picomat Plastic JSC and Thong Nhat JSC 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.