Correlation Between Travel Investment and Vietnam Airlines
Can any of the company-specific risk be diversified away by investing in both Travel Investment and Vietnam Airlines 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 Travel Investment and Vietnam Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Travel Investment and and Vietnam Airlines JSC, you can compare the effects of market volatilities on Travel Investment and Vietnam Airlines 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 Travel Investment with a short position of Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travel Investment and Vietnam Airlines.
Diversification Opportunities for Travel Investment and Vietnam Airlines
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travel and Vietnam is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Travel Investment and and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines JSC and Travel Investment 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 Travel Investment and are associated (or correlated) with Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Travel Investment i.e., Travel Investment and Vietnam Airlines go up and down completely randomly.
Pair Corralation between Travel Investment and Vietnam Airlines
Assuming the 90 days trading horizon Travel Investment is expected to generate 16.59 times less return on investment than Vietnam Airlines. But when comparing it to its historical volatility, Travel Investment and is 2.03 times less risky than Vietnam Airlines. It trades about 0.04 of its potential returns per unit of risk. Vietnam Airlines JSC is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,250,000 in Vietnam Airlines JSC on September 2, 2024 and sell it today you would earn a total of 540,000 from holding Vietnam Airlines JSC or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Travel Investment and vs. Vietnam Airlines JSC
Performance |
| Timeline |
| Travel Investment |
| Vietnam Airlines JSC |
Travel Investment and Vietnam Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travel Investment and Vietnam Airlines
The main advantage of trading using opposite Travel Investment and Vietnam Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travel Investment position performs unexpectedly, Vietnam Airlines 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 Airlines will offset losses from the drop in Vietnam Airlines' long position.| Travel Investment vs. FIT INVEST JSC | Travel Investment vs. Damsan JSC | Travel Investment vs. An Phat Plastic | Travel Investment vs. Alphanam ME |
| Vietnam Airlines vs. Song Hong Garment | Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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