Correlation Between Vina2 Investment and Thanh Dat

Can any of the company-specific risk be diversified away by investing in both Vina2 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 Vina2 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 Vina2 Investment and and Thanh Dat Investment, you can compare the effects of market volatilities on Vina2 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 Vina2 Investment with a short position of Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Thanh Dat.

Diversification Opportunities for Vina2 Investment and Thanh Dat

0.64

Correlation Coefficient

Vina2 Investment  Thanh Dat

Poor diversification

The 3 months correlation between Vina2 and Thanh is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and 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 Vina2 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 Vina2 Investment and 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 Vina2 Investment i.e., Vina2 Investment and Thanh Dat go up and down completely randomly.

Pair Corralation between Vina2 Investment and Thanh Dat

Assuming the 90 days trading horizon Vina2 Investment and is expected to generate 1.32 times more return on investment than Thanh Dat. However, Vina2 Investment is 1.32 times more volatile than Thanh Dat Investment. It trades about 0.13 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about 0.07 per unit of risk. If you would invest  800,000  in Vina2 Investment and on September 29, 2024 and sell it today you would earn a total of  190,000  from holding Vina2 Investment and or generate 23.75% return on investment over 90 days.

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

Vina2 Investment and  vs.  Thanh Dat Investment

Vina2 Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vina2 Investment and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vina2 Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Thanh Dat Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thanh Dat Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Thanh Dat may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vina2 Investment and Thanh Dat

The main advantage of trading using opposite Vina2 Investment and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 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 Vina2 Investment and 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 Transaction History module to view history of all your transactions and understand their impact on performance.