Correlation Between Vu Dang and Thanh Dat
Can any of the company-specific risk be diversified away by investing in both Vu Dang and Thanh Dat 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 Thanh Dat 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 Thanh Dat Investment, you can compare the effects of market volatilities on Vu Dang and Thanh Dat 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 Thanh Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Thanh Dat.
Diversification Opportunities for Vu Dang and Thanh Dat
Modest diversification
The 3 months correlation between SVD and Thanh is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat 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 Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Vu Dang i.e., Vu Dang and Thanh Dat go up and down completely randomly.
Pair Corralation between Vu Dang and Thanh Dat
Assuming the 90 days trading horizon Vu Dang is expected to generate 1.03 times less return on investment than Thanh Dat. But when comparing it to its historical volatility, Vu Dang Investment is 1.02 times less risky than Thanh Dat. It trades about 0.07 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,560,000 in Thanh Dat Investment on September 1, 2024 and sell it today you would earn a total of 90,000 from holding Thanh Dat Investment or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vu Dang Investment vs. Thanh Dat Investment
Performance |
| Timeline |
| Vu Dang Investment |
| Thanh Dat Investment |
Vu Dang and Thanh Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and Thanh Dat
The main advantage of trading using opposite Vu Dang and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.The idea behind Vu Dang Investment and Thanh Dat Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thanh Dat vs. Danang Education Investment | Thanh Dat vs. Sao Ta Foods | Thanh Dat vs. VTC Telecommunications JSC | Thanh Dat vs. Bao Ngoc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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