Correlation Between Vietnam Dairy and Investment
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and 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 Dairy and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Dairy Products and Investment and Industrial, you can compare the effects of market volatilities on Vietnam Dairy and 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 Dairy with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Investment.
Diversification Opportunities for Vietnam Dairy and Investment
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Investment is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial and Vietnam Dairy 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 Dairy Products are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Investment go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Investment
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Investment. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 2.93 times less risky than Investment. The stock trades about -0.06 of its potential returns per unit of risk. The Investment and Industrial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,030,000 in Investment and Industrial on November 5, 2024 and sell it today you would lose (30,000) from holding Investment and Industrial or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Investment and Industrial
Performance |
| Timeline |
| Vietnam Dairy Products |
| Investment and Industrial |
Vietnam Dairy and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Investment
The main advantage of trading using opposite Vietnam Dairy and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, 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 Investment will offset losses from the drop in Investment's long position.| Vietnam Dairy vs. AgriBank Securities JSC | Vietnam Dairy vs. Construction And Investment | Vietnam Dairy vs. PV2 Investment JSC | Vietnam Dairy vs. HVC Investment and |
| Investment vs. Long An Food | Investment vs. Nafoods Group JSC | Investment vs. Hai An Transport | Investment vs. Vietnam Dairy Products |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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