Correlation Between Vietnam Airlines and Tri Viet
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and Tri Viet 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 Tri Viet 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 Tri Viet Management, you can compare the effects of market volatilities on Vietnam Airlines and Tri Viet 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 Tri Viet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Tri Viet.
Diversification Opportunities for Vietnam Airlines and Tri Viet
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and Tri is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and Tri Viet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Viet Management 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 Tri Viet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Viet Management has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and Tri Viet go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Tri Viet
Assuming the 90 days trading horizon Vietnam Airlines is expected to generate 2.56 times less return on investment than Tri Viet. But when comparing it to its historical volatility, Vietnam Airlines JSC is 1.34 times less risky than Tri Viet. It trades about 0.03 of its potential returns per unit of risk. Tri Viet Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,040,000 in Tri Viet Management on September 15, 2024 and sell it today you would earn a total of 30,000 from holding Tri Viet Management or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Tri Viet Management
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Tri Viet Management |
Vietnam Airlines and Tri Viet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Tri Viet
The main advantage of trading using opposite Vietnam Airlines and Tri Viet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, Tri Viet 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 Tri Viet will offset losses from the drop in Tri Viet's long position.| Vietnam Airlines vs. Din Capital Investment | Vietnam Airlines vs. PV2 Investment JSC | Vietnam Airlines vs. Development Investment Construction | Vietnam Airlines vs. Vina2 Investment and |
| Tri Viet vs. Tien Giang Investment | Tri Viet vs. Construction And Investment | Tri Viet vs. Binh Duong Trade | Tri Viet vs. LDG Investment JSC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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