Correlation Between Vina2 Investment and KSD
Can any of the company-specific risk be diversified away by investing in both Vina2 Investment 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 Vina2 Investment and KSD 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 KSD, you can compare the effects of market volatilities on Vina2 Investment 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 Vina2 Investment with a short position of KSD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and KSD.
Diversification Opportunities for Vina2 Investment and KSD
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vina2 and KSD is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and KSD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSD 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 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 Vina2 Investment i.e., Vina2 Investment and KSD go up and down completely randomly.
Pair Corralation between Vina2 Investment and KSD
Assuming the 90 days trading horizon Vina2 Investment is expected to generate 1.04 times less return on investment than KSD. In addition to that, Vina2 Investment is 1.06 times more volatile than KSD. It trades about 0.01 of its total potential returns per unit of risk. KSD is currently generating about 0.01 per unit of volatility. If you would invest 580,000 in KSD on September 4, 2024 and sell it today you would lose (40,000) from holding KSD or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.39% |
| Values | Daily Returns |
Vina2 Investment and vs. KSD
Performance |
| Timeline |
| Vina2 Investment |
| KSD |
Vina2 Investment and KSD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vina2 Investment and KSD
The main advantage of trading using opposite Vina2 Investment and KSD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment 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.| Vina2 Investment vs. FIT INVEST JSC | Vina2 Investment vs. Damsan JSC | Vina2 Investment vs. An Phat Plastic | Vina2 Investment vs. Alphanam ME |
| KSD vs. Duong Hieu Trading | KSD vs. Ha Long Investment | KSD vs. Dinhvu Port Investment | KSD 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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