Correlation Between LDG Investment and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both LDG Investment 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 LDG Investment and Vietnam Dairy 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 Vietnam Dairy Products, you can compare the effects of market volatilities on LDG Investment 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 LDG Investment with a short position of Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Vietnam Dairy.
Diversification Opportunities for LDG Investment and Vietnam Dairy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LDG and Vietnam is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment 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 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 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 LDG Investment i.e., LDG Investment and Vietnam Dairy go up and down completely randomly.
Pair Corralation between LDG Investment and Vietnam Dairy
Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Vietnam Dairy. In addition to that, LDG Investment is 1.35 times more volatile than Vietnam Dairy Products. It trades about -0.56 of its total potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.17 per unit of volatility. If you would invest 6,310,000 in Vietnam Dairy Products on November 2, 2024 and sell it today you would lose (90,000) from holding Vietnam Dairy Products or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. Vietnam Dairy Products
Performance |
| Timeline |
| LDG Investment JSC |
| Vietnam Dairy Products |
LDG Investment and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Vietnam Dairy
The main advantage of trading using opposite LDG Investment and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment 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.| LDG Investment vs. Elcom Technology Communications | LDG Investment vs. Pha Lai Thermal | LDG Investment vs. HVC Investment and | LDG Investment vs. Fecon Mining JSC |
| Vietnam Dairy vs. DOMESCO Medical Import | Vietnam Dairy vs. Vietnam JSCmmercial Bank | Vietnam Dairy vs. Hung Hau Agricultural | 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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