Correlation Between Vu Dang and LDG Investment
Can any of the company-specific risk be diversified away by investing in both Vu Dang and LDG 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 LDG 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 LDG Investment JSC, you can compare the effects of market volatilities on Vu Dang and LDG 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 LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and LDG Investment.
Diversification Opportunities for Vu Dang and LDG Investment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between SVD and LDG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of Vu Dang i.e., Vu Dang and LDG Investment go up and down completely randomly.
Pair Corralation between Vu Dang and LDG Investment
Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 1.68 times more return on investment than LDG Investment. However, Vu Dang is 1.68 times more volatile than LDG Investment JSC. It trades about -0.01 of its potential returns per unit of risk. LDG Investment JSC is currently generating about -0.04 per unit of risk. If you would invest 325,000 in Vu Dang Investment on October 30, 2024 and sell it today you would lose (6,000) from holding Vu Dang Investment or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vu Dang Investment vs. LDG Investment JSC
Performance |
| Timeline |
| Vu Dang Investment |
| LDG Investment JSC |
Vu Dang and LDG Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vu Dang and LDG Investment
The main advantage of trading using opposite Vu Dang and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vu Dang position performs unexpectedly, LDG 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 LDG Investment will offset losses from the drop in LDG Investment's long position.| Vu Dang vs. VTC Telecommunications JSC | Vu Dang vs. Transimex Transportation JSC | Vu Dang vs. Ha Noi Education | Vu Dang vs. Danang Education Investment |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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