Correlation Between Global Electrical and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both Global Electrical and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on Global Electrical and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Electrical and Vincom Retail.
Diversification Opportunities for Global Electrical and Vincom Retail
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Vincom is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global Electrical Technology and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Global Electrical i.e., Global Electrical and Vincom Retail go up and down completely randomly.
Pair Corralation between Global Electrical and Vincom Retail
Assuming the 90 days trading horizon Global Electrical Technology is expected to under-perform the Vincom Retail. In addition to that, Global Electrical is 3.58 times more volatile than Vincom Retail JSC. It trades about -0.05 of its total potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.15 per unit of volatility. If you would invest 1,775,000 in Vincom Retail JSC on September 2, 2024 and sell it today you would lose (95,000) from holding Vincom Retail JSC or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Global Electrical Technology vs. Vincom Retail JSC
Performance |
| Timeline |
| Global Electrical |
| Vincom Retail JSC |
Global Electrical and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Electrical and Vincom Retail
The main advantage of trading using opposite Global Electrical and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Electrical position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail's long position.| Global Electrical vs. DOMESCO Medical Import | Global Electrical vs. Binh Duong Trade | Global Electrical vs. Petrovietnam Technical Services | Global Electrical vs. VTC Telecommunications JSC |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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