Correlation Between Vietnam Rubber and Thong Nhat
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber and Thong Nhat 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 Thong Nhat 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 Thong Nhat Rubber, you can compare the effects of market volatilities on Vietnam Rubber and Thong Nhat 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 Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Thong Nhat.
Diversification Opportunities for Vietnam Rubber and Thong Nhat
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vietnam and Thong is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group and Thong Nhat Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thong Nhat Rubber 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 Thong Nhat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thong Nhat Rubber has no effect on the direction of Vietnam Rubber i.e., Vietnam Rubber and Thong Nhat go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Thong Nhat
Assuming the 90 days trading horizon Vietnam Rubber Group is expected to generate 0.53 times more return on investment than Thong Nhat. However, Vietnam Rubber Group is 1.89 times less risky than Thong Nhat. It trades about 0.08 of its potential returns per unit of risk. Thong Nhat Rubber is currently generating about -0.04 per unit of risk. If you would invest 1,950,865 in Vietnam Rubber Group on September 4, 2024 and sell it today you would earn a total of 1,194,135 from holding Vietnam Rubber Group or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 50.87% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Thong Nhat Rubber
Performance |
| Timeline |
| Vietnam Rubber Group |
| Thong Nhat Rubber |
Vietnam Rubber and Thong Nhat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Thong Nhat
The main advantage of trading using opposite Vietnam Rubber and Thong Nhat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber position performs unexpectedly, Thong Nhat 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 Thong Nhat will offset losses from the drop in Thong Nhat's long position.| Vietnam Rubber vs. Hanoi Plastics JSC | Vietnam Rubber vs. Danang Education Investment | Vietnam Rubber vs. VTC Telecommunications JSC | Vietnam Rubber vs. Vietnam Technological And |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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