Correlation Between Southern Rubber and VN Index
Can any of the company-specific risk be diversified away by investing in both Southern Rubber and VN Index 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 Southern Rubber and VN Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Rubber Industry and VN Index, you can compare the effects of market volatilities on Southern Rubber and VN Index 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 Southern Rubber with a short position of VN Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Rubber and VN Index.
Diversification Opportunities for Southern Rubber and VN Index
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southern and VNI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Southern Rubber Industry and VN Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VN Index and Southern Rubber 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 Southern Rubber Industry are associated (or correlated) with VN Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VN Index has no effect on the direction of Southern Rubber i.e., Southern Rubber and VN Index go up and down completely randomly.
Pair Corralation between Southern Rubber and VN Index
Assuming the 90 days trading horizon Southern Rubber Industry is expected to under-perform the VN Index. In addition to that, Southern Rubber is 3.97 times more volatile than VN Index. It trades about -0.17 of its total potential returns per unit of risk. VN Index is currently generating about 0.0 per unit of volatility. If you would invest 126,036 in VN Index on October 25, 2024 and sell it today you would lose (73.00) from holding VN Index or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Southern Rubber Industry vs. VN Index
Performance |
| Timeline |
Southern Rubber and VN Index Volatility Contrast
Predicted Return Density |
| Returns |
Southern Rubber Industry
Pair trading matchups for Southern Rubber
VN Index
Pair trading matchups for VN Index
Pair Trading with Southern Rubber and VN Index
The main advantage of trading using opposite Southern Rubber and VN Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Rubber position performs unexpectedly, VN Index 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 VN Index will offset losses from the drop in VN Index's long position.| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber vs. APG Securities Joint |
| VN Index vs. Thanh Dat Investment | VN Index vs. PVI Reinsurance Corp | VN Index vs. Telecoms Informatics JSC | VN Index vs. Din Capital 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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