Correlation Between Vu Dang and KSD
Can any of the company-specific risk be diversified away by investing in both Vu Dang and KSD 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 KSD 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 KSD, you can compare the effects of market volatilities on Vu Dang and KSD 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 KSD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and KSD.
Diversification Opportunities for Vu Dang and KSD
Good diversification
The 3 months correlation between SVD and KSD is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and KSD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSD 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 KSD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSD has no effect on the direction of Vu Dang i.e., Vu Dang and KSD go up and down completely randomly.
Pair Corralation between Vu Dang and KSD
Assuming the 90 days trading horizon Vu Dang Investment is expected to under-perform the KSD. But the stock apears to be less risky and, when comparing its historical volatility, Vu Dang Investment is 1.15 times less risky than KSD. The stock trades about -0.19 of its potential returns per unit of risk. The KSD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 470,000 in KSD on October 24, 2024 and sell it today you would earn a total of 10,000 from holding KSD or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Vu Dang Investment vs. KSD
Performance |
| Timeline |
| Vu Dang Investment |
| KSD |
Vu Dang and KSD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and KSD
The main advantage of trading using opposite Vu Dang and KSD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, KSD 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 KSD will offset losses from the drop in KSD's long position.| Vu Dang vs. FIT INVEST JSC | Vu Dang vs. Damsan JSC | Vu Dang vs. An Phat Plastic | Vu Dang vs. APG Securities Joint |
| KSD vs. Vu Dang Investment | KSD vs. PetroVietnam Transportation Corp | KSD vs. 577 Investment Corp | KSD vs. Pacific Petroleum Transportation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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