Correlation Between Nam Long and Travel Investment

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

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

Diversification Opportunities for Nam Long and Travel Investment

0.68

Correlation Coefficient

Nam Long  Travel Investment

Poor diversification

The 3 months correlation between Nam and Travel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nam Long Investment and Travel Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Investment and Nam Long 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 Nam Long Investment are associated (or correlated) with Travel Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Investment has no effect on the direction of Nam Long i.e., Nam Long and Travel Investment go up and down completely randomly.

Pair Corralation between Nam Long and Travel Investment

Assuming the 90 days trading horizon Nam Long Investment is expected to generate 0.58 times more return on investment than Travel Investment. However, Nam Long Investment is 1.73 times less risky than Travel Investment. It trades about 0.25 of its potential returns per unit of risk. Travel Investment and is currently generating about 0.1 per unit of risk. If you would invest  3,029,686  in Nam Long Investment on May 7, 2025 and sell it today you would earn a total of  1,145,314  from holding Nam Long Investment or generate 37.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	82.81%
Values	Daily Returns

Nam Long Investment  vs.  Travel Investment and

Nam Long Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nam Long Investment are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Nam Long displayed solid returns over the last few months and may actually be approaching a breakup point.

Travel Investment

Risk-Adjusted Performance

OK

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

Pair Trading with Nam Long and Travel Investment

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

The idea behind Nam Long Investment and Travel Investment and 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.