Correlation Between Vietnam Dairy and Cotec Construction
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Cotec Construction 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 Cotec Construction 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 Cotec Construction JSC, you can compare the effects of market volatilities on Vietnam Dairy and Cotec Construction 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 Cotec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Cotec Construction.
Diversification Opportunities for Vietnam Dairy and Cotec Construction
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Cotec is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Cotec Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cotec Construction JSC 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 Cotec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cotec Construction JSC has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Cotec Construction go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Cotec Construction
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Cotec Construction. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 2.15 times less risky than Cotec Construction. The stock trades about -0.02 of its potential returns per unit of risk. The Cotec Construction JSC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,475,278 in Cotec Construction JSC on November 5, 2024 and sell it today you would earn a total of 4,854,722 from holding Cotec Construction JSC or generate 196.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Cotec Construction JSC
Performance |
| Timeline |
| Vietnam Dairy Products |
| Cotec Construction JSC |
Vietnam Dairy and Cotec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Cotec Construction
The main advantage of trading using opposite Vietnam Dairy and Cotec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Cotec Construction 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 Cotec Construction will offset losses from the drop in Cotec Construction'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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