Correlation Between Vietnam Rubber and Dong A
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and Dong A 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 Dong A 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 Dong A Hotel, you can compare the effects of market volatilities on Vietnam Rubber and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Dong A.
Diversification Opportunities for Vietnam Rubber and Dong A
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vietnam and Dong is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and Dong A go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Dong A
Assuming the 90 days trading horizon Vietnam Rubber Group is expected to generate 1.55 times more return on investment than Dong A. However, Vietnam Rubber is 1.55 times more volatile than Dong A Hotel. It trades about 0.01 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.07 per unit of risk. If you would invest 2,853,456 in Vietnam Rubber Group on October 22, 2024 and sell it today you would earn a total of 16,544 from holding Vietnam Rubber Group or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Dong A Hotel
Performance |
| Timeline |
| Vietnam Rubber Group |
| Dong A Hotel |
Vietnam Rubber and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Dong A
The main advantage of trading using opposite Vietnam Rubber and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Vietnam Rubber vs. Din Capital Investment | Vietnam Rubber vs. Saigon Beer Alcohol | Vietnam Rubber vs. Tien Giang Investment | Vietnam Rubber vs. Bao Ngoc Investment |
| Dong A vs. Transimex Transportation JSC | Dong A vs. Post and Telecommunications | Dong A vs. PetroVietnam Transportation Corp | Dong A vs. Transport and Industry |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |