Correlation Between PV2 Investment and Thanh Dat

Can any of the company-specific risk be diversified away by investing in both PV2 Investment and Thanh Dat 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 PV2 Investment and Thanh Dat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PV2 Investment JSC and Thanh Dat Investment, you can compare the effects of market volatilities on PV2 Investment and Thanh Dat 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 PV2 Investment with a short position of Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of PV2 Investment and Thanh Dat.

Diversification Opportunities for PV2 Investment and Thanh Dat

0.18

Correlation Coefficient

PV2 Investment  Thanh Dat

Average diversification

The 3 months correlation between PV2 and Thanh is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PV2 Investment JSC and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat Investment and PV2 Investment 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 PV2 Investment JSC are associated (or correlated) with Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of PV2 Investment i.e., PV2 Investment and Thanh Dat go up and down completely randomly.

Pair Corralation between PV2 Investment and Thanh Dat

Assuming the 90 days trading horizon PV2 Investment is expected to generate 2.82 times less return on investment than Thanh Dat. But when comparing it to its historical volatility, PV2 Investment JSC is 1.02 times less risky than Thanh Dat. It trades about 0.03 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  862,004  in Thanh Dat Investment on September 14, 2024 and sell it today you would earn a total of  1,827,996  from holding Thanh Dat Investment or generate 212.06% return on investment over 90 days.

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

PV2 Investment JSC  vs.  Thanh Dat Investment

PV2 Investment JSC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PV2 Investment JSC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, PV2 Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Thanh Dat Investment

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with PV2 Investment and Thanh Dat

The main advantage of trading using opposite PV2 Investment and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PV2 Investment position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.

The idea behind PV2 Investment JSC and Thanh Dat Investment 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.