Correlation Between Vina2 Investment and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Vina2 Investment and Hochiminh City 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 Vina2 Investment and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vina2 Investment and and Hochiminh City Metal, you can compare the effects of market volatilities on Vina2 Investment and Hochiminh City 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 Vina2 Investment with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Hochiminh City.
Diversification Opportunities for Vina2 Investment and Hochiminh City
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vina2 and Hochiminh is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and Vina2 Investment 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 Vina2 Investment and are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Vina2 Investment i.e., Vina2 Investment and Hochiminh City go up and down completely randomly.
Pair Corralation between Vina2 Investment and Hochiminh City
Assuming the 90 days trading horizon Vina2 Investment and is expected to generate 2.21 times more return on investment than Hochiminh City. However, Vina2 Investment is 2.21 times more volatile than Hochiminh City Metal. It trades about 0.03 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about 0.04 per unit of risk. If you would invest 820,000 in Vina2 Investment and on September 12, 2024 and sell it today you would earn a total of 150,000 from holding Vina2 Investment and or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vina2 Investment and vs. Hochiminh City Metal
Performance |
| Timeline |
| Vina2 Investment |
| Hochiminh City Metal |
Vina2 Investment and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vina2 Investment and Hochiminh City
The main advantage of trading using opposite Vina2 Investment and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Vina2 Investment vs. FIT INVEST JSC | Vina2 Investment vs. Damsan JSC | Vina2 Investment vs. An Phat Plastic | Vina2 Investment vs. Alphanam ME |
| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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