Correlation Between Japan Vietnam and Global Electrical
Can any of the company-specific risk be diversified away by investing in both Japan Vietnam and Global Electrical 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 Japan Vietnam and Global Electrical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Vietnam Medical and Global Electrical Technology, you can compare the effects of market volatilities on Japan Vietnam and Global Electrical 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 Japan Vietnam with a short position of Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Vietnam and Global Electrical.
Diversification Opportunities for Japan Vietnam and Global Electrical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and Global is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Japan Vietnam Medical and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical and Japan Vietnam 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 Japan Vietnam Medical are associated (or correlated) with Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of Japan Vietnam i.e., Japan Vietnam and Global Electrical go up and down completely randomly.
Pair Corralation between Japan Vietnam and Global Electrical
Assuming the 90 days trading horizon Japan Vietnam Medical is expected to generate 0.25 times more return on investment than Global Electrical. However, Japan Vietnam Medical is 3.94 times less risky than Global Electrical. It trades about -0.05 of its potential returns per unit of risk. Global Electrical Technology is currently generating about -0.05 per unit of risk. If you would invest 329,000 in Japan Vietnam Medical on September 2, 2024 and sell it today you would lose (6,000) from holding Japan Vietnam Medical or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Japan Vietnam Medical vs. Global Electrical Technology
Performance |
| Timeline |
| Japan Vietnam Medical |
| Global Electrical |
Japan Vietnam and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Vietnam and Global Electrical
The main advantage of trading using opposite Japan Vietnam and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Vietnam position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| Japan Vietnam vs. 1369 Construction JSC | Japan Vietnam vs. CEO Group JSC | Japan Vietnam vs. Development Investment Construction | Japan Vietnam vs. Petrolimex Insurance Corp |
| Global Electrical vs. DOMESCO Medical Import | Global Electrical vs. Binh Duong Trade | Global Electrical vs. Petrovietnam Technical Services | Global Electrical vs. VTC Telecommunications 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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