Correlation Between Dong Nai and Industrial Urban
Can any of the company-specific risk be diversified away by investing in both Dong Nai and Industrial Urban 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 Nai and Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong Nai Plastic and Industrial Urban Development, you can compare the effects of market volatilities on Dong Nai and Industrial Urban 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 Nai with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong Nai and Industrial Urban.
Diversification Opportunities for Dong Nai and Industrial Urban
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dong and Industrial is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dong Nai Plastic and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and Dong Nai 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 Nai Plastic are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of Dong Nai i.e., Dong Nai and Industrial Urban go up and down completely randomly.
Pair Corralation between Dong Nai and Industrial Urban
Assuming the 90 days trading horizon Dong Nai Plastic is expected to under-perform the Industrial Urban. In addition to that, Dong Nai is 1.95 times more volatile than Industrial Urban Development. It trades about -0.02 of its total potential returns per unit of risk. Industrial Urban Development is currently generating about 0.01 per unit of volatility. If you would invest 3,210,000 in Industrial Urban Development on August 31, 2024 and sell it today you would earn a total of 5,000 from holding Industrial Urban Development or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Dong Nai Plastic vs. Industrial Urban Development
Performance |
| Timeline |
| Dong Nai Plastic |
| Industrial Urban Dev |
Dong Nai and Industrial Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong Nai and Industrial Urban
The main advantage of trading using opposite Dong Nai and Industrial Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong Nai position performs unexpectedly, Industrial Urban 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 Industrial Urban will offset losses from the drop in Industrial Urban's long position.| Dong Nai vs. FIT INVEST JSC | Dong Nai vs. Damsan JSC | Dong Nai vs. An Phat Plastic | Dong Nai vs. Alphanam ME |
| Industrial Urban vs. FIT INVEST JSC | Industrial Urban vs. Damsan JSC | Industrial Urban vs. An Phat Plastic | Industrial Urban vs. Alphanam ME |
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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