Correlation Between Vietnam Dairy and Vietnam National
Can any of the company-specific risk be diversified away by investing in both Vietnam Dairy and Vietnam National 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 Vietnam National 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 Vietnam National Reinsurance, you can compare the effects of market volatilities on Vietnam Dairy and Vietnam National 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 Vietnam National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Dairy and Vietnam National.
Diversification Opportunities for Vietnam Dairy and Vietnam National
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vietnam and Vietnam is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Dairy Products and Vietnam National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam National Rei 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 Vietnam National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam National Rei has no effect on the direction of Vietnam Dairy i.e., Vietnam Dairy and Vietnam National go up and down completely randomly.
Pair Corralation between Vietnam Dairy and Vietnam National
Assuming the 90 days trading horizon Vietnam Dairy Products is expected to under-perform the Vietnam National. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Dairy Products is 1.37 times less risky than Vietnam National. The stock trades about -0.35 of its potential returns per unit of risk. The Vietnam National Reinsurance is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,170,000 in Vietnam National Reinsurance on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Vietnam National Reinsurance or generate 0.0% 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. Vietnam National Reinsurance
Performance |
| Timeline |
| Vietnam Dairy Products |
| Vietnam National Rei |
Vietnam Dairy and Vietnam National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Dairy and Vietnam National
The main advantage of trading using opposite Vietnam Dairy and Vietnam National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Dairy position performs unexpectedly, Vietnam National 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 Vietnam National will offset losses from the drop in Vietnam National's long position.| Vietnam Dairy vs. Vietnam National Reinsurance | Vietnam Dairy vs. Sao Ta Foods | Vietnam Dairy vs. Tien Phong Plastic | Vietnam Dairy vs. Ben Thanh Rubber |
| Vietnam National vs. BaoMinh Insurance Corp | Vietnam National vs. Nam Kim Steel | Vietnam National vs. Saigon Telecommunication Technologies | Vietnam National vs. Tienlen Steel Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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