Correlation Between VinaCapital Vietnam and BlackRock Latin
Can any of the company-specific risk be diversified away by investing in both VinaCapital Vietnam and BlackRock Latin 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 VinaCapital Vietnam and BlackRock Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VinaCapital Vietnam Opportunity and BlackRock Latin American, you can compare the effects of market volatilities on VinaCapital Vietnam and BlackRock Latin 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 VinaCapital Vietnam with a short position of BlackRock Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinaCapital Vietnam and BlackRock Latin.
Diversification Opportunities for VinaCapital Vietnam and BlackRock Latin
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VinaCapital and BlackRock is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding VinaCapital Vietnam Opportunit and BlackRock Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Latin American and VinaCapital Vietnam 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 VinaCapital Vietnam Opportunity are associated (or correlated) with BlackRock Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Latin American has no effect on the direction of VinaCapital Vietnam i.e., VinaCapital Vietnam and BlackRock Latin go up and down completely randomly.
Pair Corralation between VinaCapital Vietnam and BlackRock Latin
Assuming the 90 days trading horizon VinaCapital Vietnam Opportunity is expected to generate 0.65 times more return on investment than BlackRock Latin. However, VinaCapital Vietnam Opportunity is 1.55 times less risky than BlackRock Latin. It trades about -0.07 of its potential returns per unit of risk. BlackRock Latin American is currently generating about -0.09 per unit of risk. If you would invest 47,327 in VinaCapital Vietnam Opportunity on August 25, 2024 and sell it today you would lose (3,877) from holding VinaCapital Vietnam Opportunity or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VinaCapital Vietnam Opportunit vs. BlackRock Latin American
Performance |
| Timeline |
| VinaCapital Vietnam |
| BlackRock Latin American |
VinaCapital Vietnam and BlackRock Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinaCapital Vietnam and BlackRock Latin
The main advantage of trading using opposite VinaCapital Vietnam and BlackRock Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinaCapital Vietnam position performs unexpectedly, BlackRock Latin 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 BlackRock Latin will offset losses from the drop in BlackRock Latin's long position.| VinaCapital Vietnam vs. Edinburgh Worldwide Investment | VinaCapital Vietnam vs. BlackRock Latin American | VinaCapital Vietnam vs. iShares MSCI Japan | VinaCapital Vietnam vs. Amundi EUR High |
| BlackRock Latin vs. Edinburgh Worldwide Investment | BlackRock Latin vs. VinaCapital Vietnam Opportunity | BlackRock Latin vs. iShares MSCI Japan | BlackRock Latin vs. Amundi EUR High |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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