Correlation Between Vietnam Rubber and DIC Holdings
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and DIC Holdings 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 DIC Holdings 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 DIC Holdings Construction, you can compare the effects of market volatilities on Vietnam Rubber and DIC Holdings 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 DIC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and DIC Holdings.
Diversification Opportunities for Vietnam Rubber and DIC Holdings
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and DIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and DIC Holdings Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIC Holdings Construction 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 DIC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIC Holdings Construction has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and DIC Holdings go up and down completely randomly.
Pair Corralation between Vietnam Rubber and DIC Holdings
Assuming the 90 days trading horizon Vietnam Rubber is expected to generate 1.01 times less return on investment than DIC Holdings. But when comparing it to its historical volatility, Vietnam Rubber Group is 1.17 times less risky than DIC Holdings. It trades about 0.07 of its potential returns per unit of risk. DIC Holdings Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 538,089 in DIC Holdings Construction on November 5, 2024 and sell it today you would earn a total of 541,911 from holding DIC Holdings Construction or generate 100.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Rubber Group vs. DIC Holdings Construction
Performance |
| Timeline |
| Vietnam Rubber Group |
| DIC Holdings Construction |
Vietnam Rubber and DIC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and DIC Holdings
The main advantage of trading using opposite Vietnam Rubber and DIC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, DIC Holdings 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 DIC Holdings will offset losses from the drop in DIC Holdings' 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 |
| DIC Holdings vs. Vietnam Construction JSC | DIC Holdings vs. 1369 Construction JSC | DIC Holdings vs. Ducgiang Chemicals Detergent | DIC Holdings vs. Binh Duong Construction |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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