Correlation Between Vietnam Rubber and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and Southern Rubber 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 Vietnam Rubber and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Rubber Group and Southern Rubber Industry, you can compare the effects of market volatilities on Vietnam Rubber and Southern Rubber 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 Vietnam Rubber with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Southern Rubber.
Diversification Opportunities for Vietnam Rubber and Southern Rubber
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Southern is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and Vietnam Rubber 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 Vietnam Rubber Group are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and Southern Rubber go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Southern Rubber
Assuming the 90 days trading horizon Vietnam Rubber Group is expected to generate 1.22 times more return on investment than Southern Rubber. However, Vietnam Rubber is 1.22 times more volatile than Southern Rubber Industry. It trades about 0.07 of its potential returns per unit of risk. Southern Rubber Industry is currently generating about 0.01 per unit of risk. If you would invest 1,376,795 in Vietnam Rubber Group on November 5, 2024 and sell it today you would earn a total of 1,503,205 from holding Vietnam Rubber Group or generate 109.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Southern Rubber Industry
Performance |
| Timeline |
| Vietnam Rubber Group |
| Southern Rubber Industry |
Vietnam Rubber and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Southern Rubber
The main advantage of trading using opposite Vietnam Rubber and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, Southern Rubber 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 Southern Rubber will offset losses from the drop in Southern Rubber's long position.| Vietnam Rubber vs. Dinhvu Port Investment | Vietnam Rubber vs. 1369 Construction JSC | Vietnam Rubber vs. Construction And Investment | Vietnam Rubber vs. MST Investment JSC |
| Southern Rubber vs. Danang Education Investment | Southern Rubber vs. Tien Phong Plastic | Southern Rubber vs. Asia Pacific Investment | Southern Rubber vs. Post and Telecommunications |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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