Correlation Between Long Giang and Vietnam Technological
Can any of the company-specific risk be diversified away by investing in both Long Giang and Vietnam Technological 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 Long Giang and Vietnam Technological into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Giang Investment and Vietnam Technological And, you can compare the effects of market volatilities on Long Giang and Vietnam Technological 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 Long Giang with a short position of Vietnam Technological. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Giang and Vietnam Technological.
Diversification Opportunities for Long Giang and Vietnam Technological
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Long and Vietnam is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Long Giang Investment and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And and Long Giang 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 Long Giang Investment are associated (or correlated) with Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Long Giang i.e., Long Giang and Vietnam Technological go up and down completely randomly.
Pair Corralation between Long Giang and Vietnam Technological
Assuming the 90 days trading horizon Long Giang Investment is expected to generate 1.65 times more return on investment than Vietnam Technological. However, Long Giang is 1.65 times more volatile than Vietnam Technological And. It trades about 0.21 of its potential returns per unit of risk. Vietnam Technological And is currently generating about 0.25 per unit of risk. If you would invest 252,000 in Long Giang Investment on November 8, 2024 and sell it today you would earn a total of 20,000 from holding Long Giang Investment or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Giang Investment vs. Vietnam Technological And
Performance |
| Timeline |
| Long Giang Investment |
| Vietnam Technological And |
Long Giang and Vietnam Technological Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Giang and Vietnam Technological
The main advantage of trading using opposite Long Giang and Vietnam Technological positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Giang position performs unexpectedly, Vietnam Technological 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 Technological will offset losses from the drop in Vietnam Technological's long position.| Long Giang vs. Transport and Industry | Long Giang vs. Viettel Construction JSC | Long Giang vs. Kien Giang Construction | Long Giang vs. Vincom Retail JSC |
| Vietnam Technological vs. Post and Telecommunications | Vietnam Technological vs. Hcd Investment Producing | Vietnam Technological vs. FPT Digital Retail | Vietnam Technological vs. Taseco Air Services |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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