Correlation Between Vu Dang and Dong A
Can any of the company-specific risk be diversified away by investing in both Vu Dang and Dong A 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 Vu Dang and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vu Dang Investment and Dong A Hotel, you can compare the effects of market volatilities on Vu Dang and Dong A 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 Vu Dang with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Dong A.
Diversification Opportunities for Vu Dang and Dong A
Very good diversification
The 3 months correlation between SVD and Dong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and Vu Dang 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 Vu Dang Investment are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Vu Dang i.e., Vu Dang and Dong A go up and down completely randomly.
Pair Corralation between Vu Dang and Dong A
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 2.4 times more return on investment than Dong A. However, Vu Dang is 2.4 times more volatile than Dong A Hotel. It trades about 0.06 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.16 per unit of risk. If you would invest 272,000 in Vu Dang Investment on September 3, 2024 and sell it today you would earn a total of 59,000 from holding Vu Dang Investment or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Vu Dang Investment vs. Dong A Hotel
Performance |
| Timeline |
| Vu Dang Investment |
| Dong A Hotel |
Vu Dang and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Dong A
The main advantage of trading using opposite Vu Dang and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Vu Dang vs. Post and Telecommunications | Vu Dang vs. VTC Telecommunications JSC | Vu Dang vs. Elcom Technology Communications | Vu Dang vs. Pacific Petroleum Transportation |
| Dong A vs. Alphanam ME | Dong A vs. Hochiminh City Metal | Dong A vs. Atesco Industrial Cartering | Dong A vs. Danang Education Investment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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