Correlation Between Vietnam JSCmmercial and LDG Investment
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial and LDG 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 Vietnam JSCmmercial and LDG Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam JSCmmercial Bank and LDG Investment JSC, you can compare the effects of market volatilities on Vietnam JSCmmercial and LDG 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 Vietnam JSCmmercial with a short position of LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and LDG Investment.
Diversification Opportunities for Vietnam JSCmmercial and LDG Investment
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and LDG is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC and Vietnam JSCmmercial 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 JSCmmercial Bank are associated (or correlated) with LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of Vietnam JSCmmercial i.e., Vietnam JSCmmercial and LDG Investment go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and LDG Investment
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 0.46 times more return on investment than LDG Investment. However, Vietnam JSCmmercial Bank is 2.17 times less risky than LDG Investment. It trades about 0.02 of its potential returns per unit of risk. LDG Investment JSC is currently generating about 0.0 per unit of risk. If you would invest 3,530,000 in Vietnam JSCmmercial Bank on September 2, 2024 and sell it today you would earn a total of 45,000 from holding Vietnam JSCmmercial Bank or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. LDG Investment JSC
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| LDG Investment JSC |
Vietnam JSCmmercial and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and LDG Investment
The main advantage of trading using opposite Vietnam JSCmmercial and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial position performs unexpectedly, LDG 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 LDG Investment will offset losses from the drop in LDG Investment's long position.| Vietnam JSCmmercial vs. FIT INVEST JSC | Vietnam JSCmmercial vs. Damsan JSC | Vietnam JSCmmercial vs. An Phat Plastic | Vietnam JSCmmercial vs. Alphanam ME |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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