Correlation Between Vietnam Dairy and Ha Long
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Ha Long 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 Long 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 Long Investment, you can compare the effects of market volatilities on Vietnam Dairy and Ha Long 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 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Ha Long.
Diversification Opportunities for Vietnam Dairy and Ha Long
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vietnam and HID is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Ha Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Long Investment 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 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Long Investment has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Ha Long go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Ha Long
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to generate 0.64 times more return on investment than Ha Long. However, Vietnam Dairy Products is 1.57 times less risky than Ha Long. It trades about 0.01 of its potential returns per unit of risk. Ha Long Investment is currently generating about -0.04 per unit of risk. If you would invest 6,256,103 in Vietnam Dairy Products on August 31, 2024 and sell it today you would earn a total of 193,897 from holding Vietnam Dairy Products or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Dairy Products vs. Ha Long Investment
Performance |
| Timeline |
| Vietnam Dairy Products |
| Ha Long Investment |
Vietnam Dairy and Ha Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Ha Long
The main advantage of trading using opposite Vietnam Dairy and Ha Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Ha Long 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 Long will offset losses from the drop in Ha Long's long position.| Vietnam Dairy vs. Nam Kim Steel | Vietnam Dairy vs. Duong Hieu Trading | Vietnam Dairy vs. Bao Ngoc Investment | Vietnam Dairy vs. Everland Investment JSC |
| Ha Long vs. Binhthuan Agriculture Services | Ha Long vs. Century Synthetic Fiber | Ha Long vs. Cotec Construction JSC | Ha Long vs. Transport and Industry |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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