Correlation Between Vietnam Airlines and Investment
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and Investment 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 Airlines and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Airlines JSC and Investment and Industrial, you can compare the effects of market volatilities on Vietnam Airlines and Investment 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 Airlines with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Investment.
Diversification Opportunities for Vietnam Airlines and Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and Investment is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial and Vietnam Airlines 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 Airlines JSC are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and Investment go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Investment
Assuming the 90 days trading horizon Vietnam Airlines JSC is expected to generate 1.76 times more return on investment than Investment. However, Vietnam Airlines is 1.76 times more volatile than Investment and Industrial. It trades about 0.07 of its potential returns per unit of risk. Investment and Industrial is currently generating about -0.01 per unit of risk. If you would invest 1,260,000 in Vietnam Airlines JSC on October 30, 2024 and sell it today you would earn a total of 1,425,000 from holding Vietnam Airlines JSC or generate 113.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Investment and Industrial
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Investment and Industrial |
Vietnam Airlines and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Investment
The main advantage of trading using opposite Vietnam Airlines and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Vietnam Airlines vs. Vnsteel Vicasa JSC | Vietnam Airlines vs. Petrolimex Information Technology | Vietnam Airlines vs. Vu Dang Investment | Vietnam Airlines vs. Vina2 Investment and |
| Investment vs. DOMESCO Medical Import | Investment vs. HVC Investment and | Investment vs. Pha Lai Thermal | Investment vs. IDJ FINANCIAL |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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