Correlation Between Vietnam Dairy and Global Electrical
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Global Electrical 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 Global Electrical 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 Global Electrical Technology, you can compare the effects of market volatilities on Vietnam Dairy and Global Electrical 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 Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Global Electrical.
Diversification Opportunities for Vietnam Dairy and Global Electrical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vietnam and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical 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 Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Global Electrical go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Global Electrical
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Global Electrical. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 4.74 times less risky than Global Electrical. The stock trades about -0.01 of its potential returns per unit of risk. The Global Electrical Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,804,780 in Global Electrical Technology on September 4, 2024 and sell it today you would earn a total of 945,220 from holding Global Electrical Technology or generate 52.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 62.12% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Global Electrical Technology
Performance |
| Timeline |
| Vietnam Dairy Products |
| Global Electrical |
Vietnam Dairy and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Global Electrical
The main advantage of trading using opposite Vietnam Dairy and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| Vietnam Dairy vs. Elcom Technology Communications | Vietnam Dairy vs. Hai An Transport | Vietnam Dairy vs. FPT Digital Retail | Vietnam Dairy vs. Japan Vietnam Medical |
| Global Electrical vs. Transimex Transportation JSC | Global Electrical vs. Transport and Industry | Global Electrical vs. PetroVietnam Transportation Corp | Global Electrical vs. Vietnam Airlines JSC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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