Correlation Between VIETNAM ENTERPRISE and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both VIETNAM ENTERPRISE and Alibaba Health 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 VIETNAM ENTERPRISE and Alibaba Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIETNAM ENTERPRISE INV and Alibaba Health Information, you can compare the effects of market volatilities on VIETNAM ENTERPRISE and Alibaba Health 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 VIETNAM ENTERPRISE with a short position of Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIETNAM ENTERPRISE and Alibaba Health.
Diversification Opportunities for VIETNAM ENTERPRISE and Alibaba Health
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIETNAM and Alibaba is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding VIETNAM ENTERPRISE INV and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor and VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE INV are associated (or correlated) with Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of VIETNAM ENTERPRISE i.e., VIETNAM ENTERPRISE and Alibaba Health go up and down completely randomly.
Pair Corralation between VIETNAM ENTERPRISE and Alibaba Health
Assuming the 90 days horizon VIETNAM ENTERPRISE INV is expected to generate 0.33 times more return on investment than Alibaba Health. However, VIETNAM ENTERPRISE INV is 2.99 times less risky than Alibaba Health. It trades about 0.1 of its potential returns per unit of risk. Alibaba Health Information is currently generating about -0.08 per unit of risk. If you would invest 665.00 in VIETNAM ENTERPRISE INV on September 5, 2024 and sell it today you would earn a total of 15.00 from holding VIETNAM ENTERPRISE INV or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIETNAM ENTERPRISE INV vs. Alibaba Health Information
Performance |
| Timeline |
| VIETNAM ENTERPRISE INV |
| Alibaba Health Infor |
VIETNAM ENTERPRISE and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIETNAM ENTERPRISE and Alibaba Health
The main advantage of trading using opposite VIETNAM ENTERPRISE and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIETNAM ENTERPRISE position performs unexpectedly, Alibaba Health 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 Alibaba Health will offset losses from the drop in Alibaba Health's long position.| VIETNAM ENTERPRISE vs. Apple Inc | VIETNAM ENTERPRISE vs. Apple Inc | VIETNAM ENTERPRISE vs. Apple Inc | VIETNAM ENTERPRISE vs. Apple Inc |
| Alibaba Health vs. Alibaba Health Information | Alibaba Health vs. Beijing Tong Ren | Alibaba Health vs. Oriola Oyj | Alibaba Health vs. Rite Aid |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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