Correlation Between VinaCapital Vietnam and Franklin Libertyshares
Can any of the company-specific risk be diversified away by investing in both VinaCapital Vietnam and Franklin Libertyshares 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 Franklin Libertyshares 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 Franklin Libertyshares ICAV, you can compare the effects of market volatilities on VinaCapital Vietnam and Franklin Libertyshares 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 Franklin Libertyshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinaCapital Vietnam and Franklin Libertyshares.
Diversification Opportunities for VinaCapital Vietnam and Franklin Libertyshares
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VinaCapital and Franklin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding VinaCapital Vietnam Opportunit and Franklin Libertyshares ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Libertyshares 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 Franklin Libertyshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Libertyshares has no effect on the direction of VinaCapital Vietnam i.e., VinaCapital Vietnam and Franklin Libertyshares go up and down completely randomly.
Pair Corralation between VinaCapital Vietnam and Franklin Libertyshares
Assuming the 90 days trading horizon VinaCapital Vietnam Opportunity is expected to generate 1.37 times more return on investment than Franklin Libertyshares. However, VinaCapital Vietnam is 1.37 times more volatile than Franklin Libertyshares ICAV. It trades about 0.27 of its potential returns per unit of risk. Franklin Libertyshares ICAV is currently generating about -0.02 per unit of risk. If you would invest 45,000 in VinaCapital Vietnam Opportunity on October 21, 2024 and sell it today you would earn a total of 3,000 from holding VinaCapital Vietnam Opportunity or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VinaCapital Vietnam Opportunit vs. Franklin Libertyshares ICAV
Performance |
| Timeline |
| VinaCapital Vietnam |
| Franklin Libertyshares |
VinaCapital Vietnam and Franklin Libertyshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinaCapital Vietnam and Franklin Libertyshares
The main advantage of trading using opposite VinaCapital Vietnam and Franklin Libertyshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinaCapital Vietnam position performs unexpectedly, Franklin Libertyshares 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 Franklin Libertyshares will offset losses from the drop in Franklin Libertyshares' 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 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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