Correlation Between Vietnam Dairy and Ha Noi
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Ha Noi 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 Ha Noi 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 Ha Noi Education, you can compare the effects of market volatilities on Vietnam Dairy and Ha Noi 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 Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Ha Noi.
Diversification Opportunities for Vietnam Dairy and Ha Noi
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vietnam and EID is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education 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 Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Ha Noi go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Ha Noi
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Ha Noi. In addition to that, Vietnam Dairy is 1.21 times more volatile than Ha Noi Education. It trades about -0.23 of its total potential returns per unit of risk. Ha Noi Education is currently generating about -0.19 per unit of volatility. If you would invest 2,760,000 in Ha Noi Education on August 30, 2024 and sell it today you would lose (60,000) from holding Ha Noi Education or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Ha Noi Education
Performance |
| Timeline |
| Vietnam Dairy Products |
| Ha Noi Education |
Vietnam Dairy and Ha Noi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Ha Noi
The main advantage of trading using opposite Vietnam Dairy and Ha Noi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Ha Noi 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 Ha Noi will offset losses from the drop in Ha Noi'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 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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