Correlation Between POT and Japan Vietnam
Can any of the company-specific risk be diversified away by investing in both POT and Japan Vietnam 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 POT and Japan Vietnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PostTelecommunication Equipment and Japan Vietnam Medical, you can compare the effects of market volatilities on POT and Japan Vietnam 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 POT with a short position of Japan Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of POT and Japan Vietnam.
Diversification Opportunities for POT and Japan Vietnam
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POT and Japan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PostTelecommunication Equipmen and Japan Vietnam Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Vietnam Medical and POT 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 PostTelecommunication Equipment are associated (or correlated) with Japan Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Vietnam Medical has no effect on the direction of POT i.e., POT and Japan Vietnam go up and down completely randomly.
Pair Corralation between POT and Japan Vietnam
Assuming the 90 days trading horizon PostTelecommunication Equipment is expected to generate 1.09 times more return on investment than Japan Vietnam. However, POT is 1.09 times more volatile than Japan Vietnam Medical. It trades about 0.34 of its potential returns per unit of risk. Japan Vietnam Medical is currently generating about 0.21 per unit of risk. If you would invest 1,470,000 in PostTelecommunication Equipment on November 7, 2024 and sell it today you would earn a total of 100,000 from holding PostTelecommunication Equipment or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.06% |
| Values | Daily Returns |
PostTelecommunication Equipmen vs. Japan Vietnam Medical
Performance |
| Timeline |
| PostTelecommunication |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Japan Vietnam Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
POT and Japan Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POT and Japan Vietnam
The main advantage of trading using opposite POT and Japan Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POT position performs unexpectedly, Japan Vietnam 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 Japan Vietnam will offset losses from the drop in Japan Vietnam's long position.| POT vs. HVC Investment and | POT vs. Hai An Transport | POT vs. HUD1 Investment and | POT vs. Vietnam Technological And |
| Japan Vietnam vs. Elcom Technology Communications | Japan Vietnam vs. Transport and Industry | Japan Vietnam vs. Innovative Technology Development | Japan Vietnam vs. Hai An Transport |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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