Correlation Between Vietnam JSCmmercial and Transport
Can any of the company-specific risk be diversified away by investing in both Vietnam JSCmmercial and Transport 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 Transport 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 Transport and Industry, you can compare the effects of market volatilities on Vietnam JSCmmercial and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam JSCmmercial and Transport.
Diversification Opportunities for Vietnam JSCmmercial and Transport
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and Transport is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam JSCmmercial Bank and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Vietnam JSCmmercial i.e., Vietnam JSCmmercial and Transport go up and down completely randomly.
Pair Corralation between Vietnam JSCmmercial and Transport
Assuming the 90 days trading horizon Vietnam JSCmmercial Bank is expected to generate 0.69 times more return on investment than Transport. However, Vietnam JSCmmercial Bank is 1.45 times less risky than Transport. It trades about 0.14 of its potential returns per unit of risk. Transport and Industry is currently generating about -0.14 per unit of risk. If you would invest 3,495,000 in Vietnam JSCmmercial Bank on September 12, 2024 and sell it today you would earn a total of 140,000 from holding Vietnam JSCmmercial Bank or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam JSCmmercial Bank vs. Transport and Industry
Performance |
| Timeline |
| Vietnam JSCmmercial Bank |
| Transport and Industry |
Vietnam JSCmmercial and Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam JSCmmercial and Transport
The main advantage of trading using opposite Vietnam JSCmmercial and Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam JSCmmercial position performs unexpectedly, Transport 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 Transport will offset losses from the drop in Transport's long position.| Vietnam JSCmmercial vs. Petrolimex International Trading | Vietnam JSCmmercial vs. Travel Investment and | Vietnam JSCmmercial vs. Construction And Investment | Vietnam JSCmmercial vs. LDG Investment JSC |
| Transport vs. Dinhvu Port Investment | Transport vs. HVC Investment and | Transport vs. PetroVietnam Drilling Well | Transport vs. Hochiminh City Metal |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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