Correlation Between Cotec Construction and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Vietnam Dairy 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 Cotec Construction and Vietnam Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cotec Construction JSC and Vietnam Dairy Products, you can compare the effects of market volatilities on Cotec Construction and Vietnam Dairy 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 Cotec Construction with a short position of Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Vietnam Dairy.
Diversification Opportunities for Cotec Construction and Vietnam Dairy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cotec and Vietnam is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products and Cotec Construction 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 Cotec Construction JSC are associated (or correlated) with Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Cotec Construction i.e., Cotec Construction and Vietnam Dairy go up and down completely randomly.
Pair Corralation between Cotec Construction and Vietnam Dairy
Assuming the 90 days trading horizon Cotec Construction JSC is expected to generate 2.15 times more return on investment than Vietnam Dairy. However, Cotec Construction is 2.15 times more volatile than Vietnam Dairy Products. It trades about 0.1 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.02 per unit of risk. If you would invest 2,475,278 in Cotec Construction JSC on November 5, 2024 and sell it today you would earn a total of 4,854,722 from holding Cotec Construction JSC or generate 196.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cotec Construction JSC vs. Vietnam Dairy Products
Performance |
| Timeline |
| Cotec Construction JSC |
| Vietnam Dairy Products |
Cotec Construction and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and Vietnam Dairy
The main advantage of trading using opposite Cotec Construction and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, Vietnam Dairy 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 Vietnam Dairy will offset losses from the drop in Vietnam Dairy's long position.| Cotec Construction vs. Sea Air Freight | Cotec Construction vs. Kien Giang Construction | Cotec Construction vs. SCG Construction JSC | Cotec Construction vs. Binh Duong Construction |
| Vietnam Dairy vs. AgriBank Securities JSC | Vietnam Dairy vs. Construction And Investment | Vietnam Dairy vs. PV2 Investment JSC | Vietnam Dairy vs. HVC Investment and |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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