Correlation Between Vietnam Airlines and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both Vietnam Airlines and Vietnam Dairy 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 Vietnam Dairy 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 Vietnam Dairy Products, you can compare the effects of market volatilities on Vietnam Airlines and Vietnam Dairy 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 Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Airlines and Vietnam Dairy.
Diversification Opportunities for Vietnam Airlines and Vietnam Dairy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Vietnam is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Airlines JSC and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products 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 Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Vietnam Airlines i.e., Vietnam Airlines and Vietnam Dairy go up and down completely randomly.
Pair Corralation between Vietnam Airlines and Vietnam Dairy
Assuming the 90 days trading horizon Vietnam Airlines JSC is expected to generate 2.46 times more return on investment than Vietnam Dairy. However, Vietnam Airlines is 2.46 times more volatile than Vietnam Dairy Products. It trades about 0.07 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.01 per unit of risk. If you would invest 1,335,000 in Vietnam Airlines JSC on September 4, 2024 and sell it today you would earn a total of 1,465,000 from holding Vietnam Airlines JSC or generate 109.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vietnam Airlines JSC vs. Vietnam Dairy Products
Performance |
| Timeline |
| Vietnam Airlines JSC |
| Vietnam Dairy Products |
Vietnam Airlines and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Airlines and Vietnam Dairy
The main advantage of trading using opposite Vietnam Airlines and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Airlines position performs unexpectedly, Vietnam Dairy 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 Vietnam Dairy will offset losses from the drop in Vietnam Dairy's long position.| Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering | Vietnam Airlines vs. Danang Education Investment |
| Vietnam Dairy vs. Elcom Technology Communications | Vietnam Dairy vs. Hai An Transport | Vietnam Dairy vs. FPT Digital Retail | Vietnam Dairy vs. Japan Vietnam Medical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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