Correlation Between Ha Noi and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both Ha Noi and Vietnam Dairy 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 Ha Noi and Vietnam Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ha Noi Education and Vietnam Dairy Products, you can compare the effects of market volatilities on Ha Noi and Vietnam Dairy 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 Ha Noi with a short position of Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Noi and Vietnam Dairy.
Diversification Opportunities for Ha Noi and Vietnam Dairy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between EID and Vietnam is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ha Noi Education and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products and Ha Noi 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 Ha Noi Education are associated (or correlated) with Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Ha Noi i.e., Ha Noi and Vietnam Dairy go up and down completely randomly.
Pair Corralation between Ha Noi and Vietnam Dairy
Assuming the 90 days trading horizon Ha Noi Education is expected to generate 0.83 times more return on investment than Vietnam Dairy. However, Ha Noi Education is 1.21 times less risky than Vietnam Dairy. It trades about -0.19 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.23 per unit of risk. If you would invest 2,760,000 in Ha Noi Education on August 30, 2024 and sell it today you would lose (60,000) from holding Ha Noi Education or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ha Noi Education vs. Vietnam Dairy Products
Performance |
| Timeline |
| Ha Noi Education |
| Vietnam Dairy Products |
Ha Noi and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ha Noi and Vietnam Dairy
The main advantage of trading using opposite Ha Noi and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ha Noi position performs unexpectedly, Vietnam Dairy 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 Dairy will offset losses from the drop in Vietnam Dairy's long position.| Ha Noi vs. FIT INVEST JSC | Ha Noi vs. Damsan JSC | Ha Noi vs. An Phat Plastic | Ha Noi vs. APG Securities Joint |
| Vietnam Dairy vs. FIT INVEST JSC | Vietnam Dairy vs. Damsan JSC | Vietnam Dairy vs. An Phat Plastic | Vietnam Dairy vs. APG Securities Joint |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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