Correlation Between Vnsteel Vicasa and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Vnsteel Vicasa 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 Vnsteel Vicasa and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vnsteel Vicasa JSC and Hochiminh City Metal, you can compare the effects of market volatilities on Vnsteel Vicasa 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 Vnsteel Vicasa with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vnsteel Vicasa and Hochiminh City.
Diversification Opportunities for Vnsteel Vicasa and Hochiminh City
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vnsteel and Hochiminh is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC 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 Vnsteel Vicasa 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 Vnsteel Vicasa JSC 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 Vnsteel Vicasa i.e., Vnsteel Vicasa and Hochiminh City go up and down completely randomly.
Pair Corralation between Vnsteel Vicasa and Hochiminh City
Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to generate 1.83 times more return on investment than Hochiminh City. However, Vnsteel Vicasa is 1.83 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 0.03 per unit of risk. If you would invest 979,000 in Vnsteel Vicasa JSC on October 12, 2024 and sell it today you would earn a total of 86,000 from holding Vnsteel Vicasa JSC or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.47% |
| Values | Daily Returns |
Vnsteel Vicasa JSC vs. Hochiminh City Metal
Performance |
| Timeline |
| Vnsteel Vicasa JSC |
| Hochiminh City Metal |
Vnsteel Vicasa and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vnsteel Vicasa and Hochiminh City
The main advantage of trading using opposite Vnsteel Vicasa and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vnsteel Vicasa 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.| Vnsteel Vicasa vs. Danang Rubber JSC | Vnsteel Vicasa vs. Tien Phong Plastic | Vnsteel Vicasa vs. Thong Nhat Rubber | Vnsteel Vicasa vs. SMC Investment Trading |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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