Correlation Between Vietnam National and Tin Nghia
Can any of the company-specific risk be diversified away by investing in both Vietnam National and Tin Nghia 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 National and Tin Nghia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam National Reinsurance and Tin Nghia Industrial, you can compare the effects of market volatilities on Vietnam National and Tin Nghia 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 National with a short position of Tin Nghia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam National and Tin Nghia.
Diversification Opportunities for Vietnam National and Tin Nghia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vietnam and Tin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam National Reinsurance and Tin Nghia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tin Nghia Industrial and Vietnam National 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 National Reinsurance are associated (or correlated) with Tin Nghia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tin Nghia Industrial has no effect on the direction of Vietnam National i.e., Vietnam National and Tin Nghia go up and down completely randomly.
Pair Corralation between Vietnam National and Tin Nghia
Assuming the 90 days trading horizon Vietnam National Reinsurance is expected to generate 0.35 times more return on investment than Tin Nghia. However, Vietnam National Reinsurance is 2.83 times less risky than Tin Nghia. It trades about -0.03 of its potential returns per unit of risk. Tin Nghia Industrial is currently generating about -0.03 per unit of risk. If you would invest 2,290,000 in Vietnam National Reinsurance on August 29, 2024 and sell it today you would lose (10,000) from holding Vietnam National Reinsurance or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam National Reinsurance vs. Tin Nghia Industrial
Performance |
| Timeline |
| Vietnam National Rei |
| Tin Nghia Industrial |
Vietnam National and Tin Nghia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam National and Tin Nghia
The main advantage of trading using opposite Vietnam National and Tin Nghia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam National position performs unexpectedly, Tin Nghia 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 Tin Nghia will offset losses from the drop in Tin Nghia's long position.| Vietnam National vs. FIT INVEST JSC | Vietnam National vs. Damsan JSC | Vietnam National vs. An Phat Plastic | Vietnam National vs. APG Securities Joint |
| Tin Nghia vs. Ben Thanh Rubber | Tin Nghia vs. Military Insurance Corp | Tin Nghia vs. FPT Digital Retail | Tin Nghia 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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