Correlation Between Vietnam Enterprise and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Vietnam Enterprise and Monks 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 Vietnam Enterprise and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Enterprise Investments and Monks Investment Trust, you can compare the effects of market volatilities on Vietnam Enterprise and Monks 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 Vietnam Enterprise with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Enterprise and Monks Investment.
Diversification Opportunities for Vietnam Enterprise and Monks Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vietnam and Monks is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Enterprise Investments and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust and Vietnam Enterprise 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 Vietnam Enterprise Investments are associated (or correlated) with Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Vietnam Enterprise i.e., Vietnam Enterprise and Monks Investment go up and down completely randomly.
Pair Corralation between Vietnam Enterprise and Monks Investment
Assuming the 90 days trading horizon Vietnam Enterprise is expected to generate 3.23 times less return on investment than Monks Investment. In addition to that, Vietnam Enterprise is 1.68 times more volatile than Monks Investment Trust. It trades about 0.01 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.05 per unit of volatility. If you would invest 103,775 in Monks Investment Trust on November 7, 2024 and sell it today you would earn a total of 28,625 from holding Monks Investment Trust or generate 27.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Vietnam Enterprise Investments vs. Monks Investment Trust
Performance |
Timeline |
Vietnam Enterprise |
Monks Investment Trust |
Vietnam Enterprise and Monks Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vietnam Enterprise and Monks Investment
The main advantage of trading using opposite Vietnam Enterprise and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Enterprise position performs unexpectedly, Monks 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 Monks Investment will offset losses from the drop in Monks Investment's long position.Vietnam Enterprise vs. Quadrise Plc | Vietnam Enterprise vs. ImmuPharma PLC | Vietnam Enterprise vs. Intuitive Investments Group | Vietnam Enterprise vs. European Metals Holdings |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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