Correlation Between LDG Investment and Vu Dang
Can any of the company-specific risk be diversified away by investing in both LDG Investment and Vu Dang 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 LDG Investment and Vu Dang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LDG Investment JSC and Vu Dang Investment, you can compare the effects of market volatilities on LDG Investment and Vu Dang 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 LDG Investment with a short position of Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Vu Dang.
Diversification Opportunities for LDG Investment and Vu Dang
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LDG and SVD is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment and LDG Investment 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 LDG Investment JSC are associated (or correlated) with Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of LDG Investment i.e., LDG Investment and Vu Dang go up and down completely randomly.
Pair Corralation between LDG Investment and Vu Dang
Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Vu Dang. In addition to that, LDG Investment is 1.1 times more volatile than Vu Dang Investment. It trades about -0.05 of its total potential returns per unit of risk. Vu Dang Investment is currently generating about 0.02 per unit of volatility. If you would invest 312,000 in Vu Dang Investment on October 16, 2024 and sell it today you would earn a total of 15,000 from holding Vu Dang Investment or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. Vu Dang Investment
Performance |
| Timeline |
| LDG Investment JSC |
| Vu Dang Investment |
LDG Investment and Vu Dang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Vu Dang
The main advantage of trading using opposite LDG Investment and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang's long position.| LDG Investment vs. IDJ FINANCIAL | LDG Investment vs. SCG Construction JSC | LDG Investment vs. Vietnam JSCmmercial Bank | LDG Investment vs. Vietnam Petroleum Transport |
| Vu Dang vs. Asia Commercial Bank | Vu Dang vs. Thong Nhat Rubber | Vu Dang vs. Vietnam JSCmmercial Bank | Vu Dang vs. Truong Thanh Furniture |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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