Correlation Between Global Electrical and Vinacomin Power
Can any of the company-specific risk be diversified away by investing in both Global Electrical and Vinacomin Power 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 Global Electrical and Vinacomin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Electrical Technology and Vinacomin Power Holding, you can compare the effects of market volatilities on Global Electrical and Vinacomin Power 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 Global Electrical with a short position of Vinacomin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Electrical and Vinacomin Power.
Diversification Opportunities for Global Electrical and Vinacomin Power
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Vinacomin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global Electrical Technology and Vinacomin Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinacomin Power Holding and Global Electrical 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 Global Electrical Technology are associated (or correlated) with Vinacomin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinacomin Power Holding has no effect on the direction of Global Electrical i.e., Global Electrical and Vinacomin Power go up and down completely randomly.
Pair Corralation between Global Electrical and Vinacomin Power
Assuming the 90 days trading horizon Global Electrical Technology is expected to under-perform the Vinacomin Power. In addition to that, Global Electrical is 1.68 times more volatile than Vinacomin Power Holding. It trades about -0.04 of its total potential returns per unit of risk. Vinacomin Power Holding is currently generating about -0.04 per unit of volatility. If you would invest 1,280,000 in Vinacomin Power Holding on September 13, 2024 and sell it today you would lose (90,000) from holding Vinacomin Power Holding or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.42% |
| Values | Daily Returns |
Global Electrical Technology vs. Vinacomin Power Holding
Performance |
| Timeline |
| Global Electrical |
| Vinacomin Power Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Electrical and Vinacomin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Electrical and Vinacomin Power
The main advantage of trading using opposite Global Electrical and Vinacomin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Electrical position performs unexpectedly, Vinacomin Power 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 Vinacomin Power will offset losses from the drop in Vinacomin Power's long position.| Global Electrical vs. Song Hong Garment | Global Electrical vs. Alphanam ME | Global Electrical vs. Hochiminh City Metal | Global Electrical vs. Atesco Industrial Cartering |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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