Correlation Between VinaCapital Vietnam and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both VinaCapital Vietnam and Vanguard FTSE 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 Vanguard FTSE 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 Vanguard FTSE Developed, you can compare the effects of market volatilities on VinaCapital Vietnam and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinaCapital Vietnam and Vanguard FTSE.
Diversification Opportunities for VinaCapital Vietnam and Vanguard FTSE
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VinaCapital and Vanguard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding VinaCapital Vietnam Opportunit and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of VinaCapital Vietnam i.e., VinaCapital Vietnam and Vanguard FTSE go up and down completely randomly.
Pair Corralation between VinaCapital Vietnam and Vanguard FTSE
Assuming the 90 days trading horizon VinaCapital Vietnam Opportunity is expected to generate 1.09 times more return on investment than Vanguard FTSE. However, VinaCapital Vietnam is 1.09 times more volatile than Vanguard FTSE Developed. It trades about 0.24 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about -0.08 per unit of risk. If you would invest 43,750 in VinaCapital Vietnam Opportunity on September 29, 2024 and sell it today you would earn a total of 1,850 from holding VinaCapital Vietnam Opportunity or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
VinaCapital Vietnam Opportunit vs. Vanguard FTSE Developed
Performance |
| Timeline |
| VinaCapital Vietnam |
| Vanguard FTSE Developed |
VinaCapital Vietnam and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinaCapital Vietnam and Vanguard FTSE
The main advantage of trading using opposite VinaCapital Vietnam and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinaCapital Vietnam position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| VinaCapital Vietnam vs. Vanguard FTSE Developed | VinaCapital Vietnam vs. Leverage Shares 2x | VinaCapital Vietnam vs. Amundi Index Solutions | VinaCapital Vietnam vs. Amundi Index Solutions |
| Vanguard FTSE vs. SP 500 VIX | Vanguard FTSE vs. Leverage Shares 3x | Vanguard FTSE vs. Leverage Shares 3x | Vanguard FTSE vs. WisdomTree Natural Gas |
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 Stocks Directory module to find actively traded stocks across global markets.
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