Correlation Between CMC Investment and Vina2 Investment
Can any of the company-specific risk be diversified away by investing in both CMC Investment and Vina2 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 CMC Investment and Vina2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMC Investment JSC and Vina2 Investment and, you can compare the effects of market volatilities on CMC Investment and Vina2 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 CMC Investment with a short position of Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMC Investment and Vina2 Investment.
Diversification Opportunities for CMC Investment and Vina2 Investment
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CMC and Vina2 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CMC Investment JSC and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment and CMC 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 CMC Investment JSC are associated (or correlated) with Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of CMC Investment i.e., CMC Investment and Vina2 Investment go up and down completely randomly.
Pair Corralation between CMC Investment and Vina2 Investment
Assuming the 90 days trading horizon CMC Investment JSC is expected to generate 1.79 times more return on investment than Vina2 Investment. However, CMC Investment is 1.79 times more volatile than Vina2 Investment and. It trades about 0.1 of its potential returns per unit of risk. Vina2 Investment and is currently generating about 0.05 per unit of risk. If you would invest 570,000 in CMC Investment JSC on August 26, 2024 and sell it today you would earn a total of 30,000 from holding CMC Investment JSC or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
CMC Investment JSC vs. Vina2 Investment and
Performance |
| Timeline |
| CMC Investment JSC |
| Vina2 Investment |
CMC Investment and Vina2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMC Investment and Vina2 Investment
The main advantage of trading using opposite CMC Investment and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMC Investment position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.| CMC Investment vs. FIT INVEST JSC | CMC Investment vs. Damsan JSC | CMC Investment vs. An Phat Plastic | CMC Investment vs. APG Securities Joint |
| Vina2 Investment vs. FIT INVEST JSC | Vina2 Investment vs. Damsan JSC | Vina2 Investment vs. An Phat Plastic | Vina2 Investment vs. APG Securities Joint |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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