Correlation Between Innovative Technology and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Innovative Technology and Vietnam Rubber 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 Innovative Technology and Vietnam Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Technology Development and Vietnam Rubber Group, you can compare the effects of market volatilities on Innovative Technology and Vietnam Rubber 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 Innovative Technology with a short position of Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and Vietnam Rubber.
Diversification Opportunities for Innovative Technology and Vietnam Rubber
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovative and Vietnam is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group and Innovative Technology 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 Innovative Technology Development are associated (or correlated) with Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Innovative Technology i.e., Innovative Technology and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Innovative Technology and Vietnam Rubber
Assuming the 90 days trading horizon Innovative Technology is expected to generate 1.37 times less return on investment than Vietnam Rubber. In addition to that, Innovative Technology is 1.39 times more volatile than Vietnam Rubber Group. It trades about 0.24 of its total potential returns per unit of risk. Vietnam Rubber Group is currently generating about 0.45 per unit of volatility. If you would invest 2,925,000 in Vietnam Rubber Group on November 29, 2024 and sell it today you would earn a total of 335,000 from holding Vietnam Rubber Group or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Technology Developm vs. Vietnam Rubber Group
Performance |
| Timeline |
| Innovative Technology |
| Vietnam Rubber Group |
Innovative Technology and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Technology and Vietnam Rubber
The main advantage of trading using opposite Innovative Technology and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Technology position performs unexpectedly, Vietnam Rubber 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 Rubber will offset losses from the drop in Vietnam Rubber's long position.| Innovative Technology vs. Song Hong Construction | Innovative Technology vs. PC3 Investment JSC | Innovative Technology vs. Fecon Mining JSC | Innovative Technology vs. Long Giang Investment |
| Vietnam Rubber vs. Pha Le Plastics | Vietnam Rubber vs. Pha Lai Thermal | Vietnam Rubber vs. Innovative Technology Development | Vietnam Rubber vs. Petrolimex Information Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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