Correlation Between Vu Dang and Development Investment
Can any of the company-specific risk be diversified away by investing in both Vu Dang and Development Investment 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 Development Investment 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 Development Investment Construction, you can compare the effects of market volatilities on Vu Dang and Development Investment 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 Development Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Development Investment.
Diversification Opportunities for Vu Dang and Development Investment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SVD and Development is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Development Investment Constru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Development Investment 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 Development Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Development Investment has no effect on the direction of Vu Dang i.e., Vu Dang and Development Investment go up and down completely randomly.
Pair Corralation between Vu Dang and Development Investment
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 0.83 times more return on investment than Development Investment. However, Vu Dang Investment is 1.2 times less risky than Development Investment. It trades about 0.14 of its potential returns per unit of risk. Development Investment Construction is currently generating about -0.03 per unit of risk. If you would invest 284,000 in Vu Dang Investment on August 31, 2024 and sell it today you would earn a total of 65,000 from holding Vu Dang Investment or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.58% |
| Values | Daily Returns |
Vu Dang Investment vs. Development Investment Constru
Performance |
| Timeline |
| Vu Dang Investment |
| Development Investment |
Vu Dang and Development Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Development Investment
The main advantage of trading using opposite Vu Dang and Development Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, Development Investment 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 Development Investment will offset losses from the drop in Development Investment's long position.| Vu Dang vs. Ben Thanh Rubber | Vu Dang vs. Vietnam JSCmmercial Bank | Vu Dang vs. Investment and Industrial | Vu Dang vs. Tienlen Steel Corp |
| Development Investment vs. Telecoms Informatics JSC | Development Investment vs. Thanh Dat Investment | Development Investment vs. Vien Dong Investment | Development Investment vs. Everland Investment JSC |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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