Correlation Between KSD and Vinhomes JSC
Can any of the company-specific risk be diversified away by investing in both KSD and Vinhomes JSC 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 KSD and Vinhomes JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSD and Vinhomes JSC, you can compare the effects of market volatilities on KSD and Vinhomes JSC 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 KSD with a short position of Vinhomes JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSD and Vinhomes JSC.
Diversification Opportunities for KSD and Vinhomes JSC
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KSD and Vinhomes is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KSD and Vinhomes JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinhomes JSC and KSD 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 KSD are associated (or correlated) with Vinhomes JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinhomes JSC has no effect on the direction of KSD i.e., KSD and Vinhomes JSC go up and down completely randomly.
Pair Corralation between KSD and Vinhomes JSC
Assuming the 90 days trading horizon KSD is expected to under-perform the Vinhomes JSC. In addition to that, KSD is 2.3 times more volatile than Vinhomes JSC. It trades about -0.03 of its total potential returns per unit of risk. Vinhomes JSC is currently generating about -0.03 per unit of volatility. If you would invest 4,250,000 in Vinhomes JSC on November 2, 2024 and sell it today you would lose (300,000) from holding Vinhomes JSC or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.55% |
| Values | Daily Returns |
KSD vs. Vinhomes JSC
Performance |
| Timeline |
| KSD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Vinhomes JSC |
KSD and Vinhomes JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSD and Vinhomes JSC
The main advantage of trading using opposite KSD and Vinhomes JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSD position performs unexpectedly, Vinhomes JSC 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 Vinhomes JSC will offset losses from the drop in Vinhomes JSC's long position.The idea behind KSD and Vinhomes JSC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vinhomes JSC vs. South Basic Chemicals | Vinhomes JSC vs. Everland Investment JSC | Vinhomes JSC vs. Ducgiang Chemicals Detergent | Vinhomes JSC vs. PV2 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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