Correlation Between Aberdeen New and VinaCapital Vietnam
Can any of the company-specific risk be diversified away by investing in both Aberdeen New and VinaCapital Vietnam 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 Aberdeen New and VinaCapital Vietnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen New India and VinaCapital Vietnam Opportunity, you can compare the effects of market volatilities on Aberdeen New and VinaCapital Vietnam 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 Aberdeen New with a short position of VinaCapital Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen New and VinaCapital Vietnam.
Diversification Opportunities for Aberdeen New and VinaCapital Vietnam
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and VinaCapital is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and VinaCapital Vietnam Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinaCapital Vietnam and Aberdeen New 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 Aberdeen New India are associated (or correlated) with VinaCapital Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinaCapital Vietnam has no effect on the direction of Aberdeen New i.e., Aberdeen New and VinaCapital Vietnam go up and down completely randomly.
Pair Corralation between Aberdeen New and VinaCapital Vietnam
Assuming the 90 days trading horizon Aberdeen New India is expected to generate 1.15 times more return on investment than VinaCapital Vietnam. However, Aberdeen New is 1.15 times more volatile than VinaCapital Vietnam Opportunity. It trades about 0.34 of its potential returns per unit of risk. VinaCapital Vietnam Opportunity is currently generating about -0.06 per unit of risk. If you would invest 74,800 in Aberdeen New India on August 28, 2024 and sell it today you would earn a total of 6,000 from holding Aberdeen New India or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen New India vs. VinaCapital Vietnam Opportunit
Performance |
| Timeline |
| Aberdeen New India |
| VinaCapital Vietnam |
Aberdeen New and VinaCapital Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen New and VinaCapital Vietnam
The main advantage of trading using opposite Aberdeen New and VinaCapital Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen New position performs unexpectedly, VinaCapital Vietnam 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 VinaCapital Vietnam will offset losses from the drop in VinaCapital Vietnam's long position.| Aberdeen New vs. Scottish Mortgage Investment | Aberdeen New vs. Baillie Gifford Growth | Aberdeen New vs. Downing Strategic Micro Cap |
| VinaCapital Vietnam vs. Edinburgh Worldwide Investment | VinaCapital Vietnam vs. BlackRock Latin American | VinaCapital Vietnam vs. iShares MSCI Japan | VinaCapital Vietnam vs. Amundi EUR High |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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