Correlation Between Vietnam Dairy and Viettel Construction
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Viettel 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 Viettel 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 Viettel Construction JSC, you can compare the effects of market volatilities on Vietnam Dairy and Viettel 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 Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Viettel Construction.
Diversification Opportunities for Vietnam Dairy and Viettel Construction
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vietnam and Viettel is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel 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 Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Viettel Construction go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Viettel Construction
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to generate 0.26 times more return on investment than Viettel Construction. However, Vietnam Dairy Products is 3.81 times less risky than Viettel Construction. It trades about -0.23 of its potential returns per unit of risk. Viettel Construction JSC is currently generating about -0.18 per unit of risk. If you would invest 6,700,000 in Vietnam Dairy Products on August 30, 2024 and sell it today you would lose (220,000) from holding Vietnam Dairy Products or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Viettel Construction JSC
Performance |
| Timeline |
| Vietnam Dairy Products |
| Viettel Construction JSC |
Vietnam Dairy and Viettel Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Viettel Construction
The main advantage of trading using opposite Vietnam Dairy and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Viettel 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 Viettel Construction will offset losses from the drop in Viettel Construction's long position.| Vietnam Dairy vs. FIT INVEST JSC | Vietnam Dairy vs. Damsan JSC | Vietnam Dairy vs. An Phat Plastic | Vietnam Dairy vs. Alphanam ME |
| Viettel Construction vs. Sea Air Freight | Viettel Construction vs. DOMESCO Medical Import | Viettel Construction vs. Military Insurance Corp | Viettel Construction vs. Japan Vietnam Medical |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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