Correlation Between Vietnam Rubber and Japan Vietnam
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and Japan Vietnam 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 Japan Vietnam 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 Japan Vietnam Medical, you can compare the effects of market volatilities on Vietnam Rubber and Japan Vietnam 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 Japan Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Japan Vietnam.
Diversification Opportunities for Vietnam Rubber and Japan Vietnam
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and Japan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and Japan Vietnam Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Vietnam Medical 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 Japan Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Vietnam Medical has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and Japan Vietnam go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Japan Vietnam
Assuming the 90 days trading horizon Vietnam Rubber is expected to generate 8.18 times less return on investment than Japan Vietnam. But when comparing it to its historical volatility, Vietnam Rubber Group is 1.53 times less risky than Japan Vietnam. It trades about 0.05 of its potential returns per unit of risk. Japan Vietnam Medical is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 310,000 in Japan Vietnam Medical on September 16, 2024 and sell it today you would earn a total of 38,000 from holding Japan Vietnam Medical or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Japan Vietnam Medical
Performance |
| Timeline |
| Vietnam Rubber Group |
| Japan Vietnam Medical |
Vietnam Rubber and Japan Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Japan Vietnam
The main advantage of trading using opposite Vietnam Rubber and Japan Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, Japan Vietnam 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 Japan Vietnam will offset losses from the drop in Japan Vietnam's long position.| Vietnam Rubber vs. FIT INVEST JSC | Vietnam Rubber vs. Damsan JSC | Vietnam Rubber vs. An Phat Plastic | Vietnam Rubber vs. Alphanam ME |
| Japan Vietnam vs. Saigon Beer Alcohol | Japan Vietnam vs. Ben Thanh Rubber | Japan Vietnam vs. Vietnam Rubber Group | Japan Vietnam vs. An Phat Plastic |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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