Correlation Between Vietnam Manufacturing and Neo Neon
Can any of the company-specific risk be diversified away by investing in both Vietnam Manufacturing and Neo Neon 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 Vietnam Manufacturing and Neo Neon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Manufacturing and and Neo Neon Holdings Limited, you can compare the effects of market volatilities on Vietnam Manufacturing and Neo Neon 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 Vietnam Manufacturing with a short position of Neo Neon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Manufacturing and Neo Neon.
Diversification Opportunities for Vietnam Manufacturing and Neo Neon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vietnam and Neo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Manufacturing and and Neo Neon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Neon Holdings and Vietnam Manufacturing 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 Vietnam Manufacturing and are associated (or correlated) with Neo Neon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Neon Holdings has no effect on the direction of Vietnam Manufacturing i.e., Vietnam Manufacturing and Neo Neon go up and down completely randomly.
Pair Corralation between Vietnam Manufacturing and Neo Neon
Assuming the 90 days trading horizon Vietnam Manufacturing and is expected to under-perform the Neo Neon. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Manufacturing and is 1.7 times less risky than Neo Neon. The stock trades about -0.01 of its potential returns per unit of risk. The Neo Neon Holdings Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Neo Neon Holdings Limited on September 12, 2024 and sell it today you would earn a total of 34.00 from holding Neo Neon Holdings Limited or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Manufacturing and vs. Neo Neon Holdings Limited
Performance |
| Timeline |
| Vietnam Manufacturing and |
| Neo Neon Holdings |
Vietnam Manufacturing and Neo Neon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Manufacturing and Neo Neon
The main advantage of trading using opposite Vietnam Manufacturing and Neo Neon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Manufacturing position performs unexpectedly, Neo Neon 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 Neo Neon will offset losses from the drop in Neo Neon's long position.| Vietnam Manufacturing vs. Neo Neon Holdings Limited | Vietnam Manufacturing vs. Ju Teng International | Vietnam Manufacturing vs. Digital China Holdings | Vietnam Manufacturing vs. Tingyi Holding Corp |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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