Correlation Between Techcom Vietnam and Truong Thanh

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

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

Diversification Opportunities for Techcom Vietnam and Truong Thanh

0.63

Correlation Coefficient

Techcom Vietnam  Truong Thanh

Poor diversification

The 3 months correlation between Techcom and Truong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Techcom Vietnam REIT and Truong Thanh Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truong Thanh Furniture and Techcom Vietnam 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 Techcom Vietnam REIT are associated (or correlated) with Truong Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truong Thanh Furniture has no effect on the direction of Techcom Vietnam i.e., Techcom Vietnam and Truong Thanh go up and down completely randomly.

Pair Corralation between Techcom Vietnam and Truong Thanh

Assuming the 90 days trading horizon Techcom Vietnam REIT is expected to generate 1.98 times more return on investment than Truong Thanh. However, Techcom Vietnam is 1.98 times more volatile than Truong Thanh Furniture. It trades about 0.22 of its potential returns per unit of risk. Truong Thanh Furniture is currently generating about 0.18 per unit of risk. If you would invest  527,000  in Techcom Vietnam REIT on May 2, 2025 and sell it today you would earn a total of  302,000  from holding Techcom Vietnam REIT or generate 57.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Techcom Vietnam REIT  vs.  Truong Thanh Furniture

Techcom Vietnam REIT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Techcom Vietnam REIT are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Techcom Vietnam demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Truong Thanh Furniture

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Truong Thanh Furniture are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Truong Thanh displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Techcom Vietnam and Truong Thanh

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

The idea behind Techcom Vietnam REIT and Truong Thanh Furniture 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.