Correlation Between Dong A and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Dong A and Vietnam Rubber 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 Dong A and Vietnam Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Hotel and Vietnam Rubber Group, you can compare the effects of market volatilities on Dong A and Vietnam Rubber 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 Dong A with a short position of Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Vietnam Rubber.
Diversification Opportunities for Dong A and Vietnam Rubber
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and Vietnam is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Hotel and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group and Dong A 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 Dong A Hotel are associated (or correlated) with Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Dong A i.e., Dong A and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Dong A and Vietnam Rubber
Assuming the 90 days trading horizon Dong A Hotel is expected to generate 2.78 times more return on investment than Vietnam Rubber. However, Dong A is 2.78 times more volatile than Vietnam Rubber Group. It trades about 0.03 of its potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.25 per unit of risk. If you would invest 326,000 in Dong A Hotel on October 22, 2024 and sell it today you would earn a total of 2,000 from holding Dong A Hotel or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Hotel vs. Vietnam Rubber Group
Performance |
| Timeline |
| Dong A Hotel |
| Vietnam Rubber Group |
Dong A and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Vietnam Rubber
The main advantage of trading using opposite Dong A and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Vietnam Rubber 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 Rubber will offset losses from the drop in Vietnam Rubber's long position.| Dong A vs. Transimex Transportation JSC | Dong A vs. Post and Telecommunications | Dong A vs. PetroVietnam Transportation Corp | Dong A vs. Transport and Industry |
| Vietnam Rubber vs. Din Capital Investment | Vietnam Rubber vs. Saigon Beer Alcohol | Vietnam Rubber vs. Tien Giang Investment | Vietnam Rubber vs. Bao Ngoc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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