Correlation Between VinaCapital Vietnam and ETC On
Can any of the company-specific risk be diversified away by investing in both VinaCapital Vietnam and ETC On 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 ETC On 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 ETC on CMCI, you can compare the effects of market volatilities on VinaCapital Vietnam and ETC On 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 ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinaCapital Vietnam and ETC On.
Diversification Opportunities for VinaCapital Vietnam and ETC On
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VinaCapital and ETC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding VinaCapital Vietnam Opportunit and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI 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 ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of VinaCapital Vietnam i.e., VinaCapital Vietnam and ETC On go up and down completely randomly.
Pair Corralation between VinaCapital Vietnam and ETC On
Assuming the 90 days trading horizon VinaCapital Vietnam Opportunity is expected to generate 0.65 times more return on investment than ETC On. However, VinaCapital Vietnam Opportunity is 1.54 times less risky than ETC On. It trades about -0.21 of its potential returns per unit of risk. ETC on CMCI is currently generating about -0.25 per unit of risk. If you would invest 45,000 in VinaCapital Vietnam Opportunity on September 4, 2024 and sell it today you would lose (1,700) from holding VinaCapital Vietnam Opportunity or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
VinaCapital Vietnam Opportunit vs. ETC on CMCI
Performance |
| Timeline |
| VinaCapital Vietnam |
| ETC on CMCI |
VinaCapital Vietnam and ETC On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinaCapital Vietnam and ETC On
The main advantage of trading using opposite VinaCapital Vietnam and ETC On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinaCapital Vietnam position performs unexpectedly, ETC On 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 ETC On will offset losses from the drop in ETC On's long position.| VinaCapital Vietnam vs. Scottish Mortgage Investment | VinaCapital Vietnam vs. Edinburgh Worldwide Investment | VinaCapital Vietnam vs. Baillie Gifford Growth | VinaCapital Vietnam vs. Blackrock Energy and |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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