Correlation Between Vina2 Investment and Vietnam Airlines
Can any of the company-specific risk be diversified away by investing in both Vina2 Investment and Vietnam Airlines 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 Vietnam Airlines 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 Vietnam Airlines JSC, you can compare the effects of market volatilities on Vina2 Investment and Vietnam Airlines 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 Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Vietnam Airlines.
Diversification Opportunities for Vina2 Investment and Vietnam Airlines
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vina2 and Vietnam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines JSC 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 Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Vina2 Investment i.e., Vina2 Investment and Vietnam Airlines go up and down completely randomly.
Pair Corralation between Vina2 Investment and Vietnam Airlines
Assuming the 90 days trading horizon Vina2 Investment and is expected to generate 1.3 times more return on investment than Vietnam Airlines. However, Vina2 Investment is 1.3 times more volatile than Vietnam Airlines JSC. It trades about 0.15 of its potential returns per unit of risk. Vietnam Airlines JSC is currently generating about 0.03 per unit of risk. If you would invest 860,000 in Vina2 Investment and on September 15, 2024 and sell it today you would earn a total of 80,000 from holding Vina2 Investment and or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vina2 Investment and vs. Vietnam Airlines JSC
Performance |
| Timeline |
| Vina2 Investment |
| Vietnam Airlines JSC |
Vina2 Investment and Vietnam Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vina2 Investment and Vietnam Airlines
The main advantage of trading using opposite Vina2 Investment and Vietnam Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment position performs unexpectedly, Vietnam Airlines 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 Vietnam Airlines will offset losses from the drop in Vietnam Airlines' long position.| Vina2 Investment vs. FIT INVEST JSC | Vina2 Investment vs. Damsan JSC | Vina2 Investment vs. An Phat Plastic | Vina2 Investment vs. Alphanam ME |
| Vietnam Airlines vs. Din Capital Investment | Vietnam Airlines vs. PV2 Investment JSC | Vietnam Airlines vs. Development Investment Construction | Vietnam Airlines vs. Vina2 Investment and |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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