Correlation Between VinaCapital Vietnam and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both VinaCapital Vietnam and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on VinaCapital Vietnam and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinaCapital Vietnam and FIRST TRUST.
Diversification Opportunities for VinaCapital Vietnam and FIRST TRUST
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VinaCapital and FIRST is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding VinaCapital Vietnam Opportunit and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of VinaCapital Vietnam i.e., VinaCapital Vietnam and FIRST TRUST go up and down completely randomly.
Pair Corralation between VinaCapital Vietnam and FIRST TRUST
Assuming the 90 days trading horizon VinaCapital Vietnam is expected to generate 449.41 times less return on investment than FIRST TRUST. But when comparing it to its historical volatility, VinaCapital Vietnam Opportunity is 107.26 times less risky than FIRST TRUST. It trades about 0.02 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,708 in FIRST TRUST GLOBAL on December 8, 2024 and sell it today you would earn a total of 233,992 from holding FIRST TRUST GLOBAL or generate 8640.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.27% |
| Values | Daily Returns |
VinaCapital Vietnam Opportunit vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| VinaCapital Vietnam |
| FIRST TRUST GLOBAL |
VinaCapital Vietnam and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinaCapital Vietnam and FIRST TRUST
The main advantage of trading using opposite VinaCapital Vietnam and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinaCapital Vietnam position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| VinaCapital Vietnam vs. iShares MSCI Japan | VinaCapital Vietnam vs. Amundi EUR High | VinaCapital Vietnam vs. iShares JP Morgan | VinaCapital Vietnam vs. Xtrackers MSCI |
| FIRST TRUST vs. Scottish Mortgage Investment | FIRST TRUST vs. VinaCapital Vietnam Opportunity | FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. Baillie Gifford Growth |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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