Correlation Between Van Phat and Idico JSC
Can any of the company-specific risk be diversified away by investing in both Van Phat and Idico JSC 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 Van Phat and Idico JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Van Phat Hung and Idico JSC, you can compare the effects of market volatilities on Van Phat and Idico JSC 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 Van Phat with a short position of Idico JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van Phat and Idico JSC.
Diversification Opportunities for Van Phat and Idico JSC
Weak diversification
The 3 months correlation between Van and Idico is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Van Phat Hung and Idico JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idico JSC and Van Phat 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 Van Phat Hung are associated (or correlated) with Idico JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idico JSC has no effect on the direction of Van Phat i.e., Van Phat and Idico JSC go up and down completely randomly.
Pair Corralation between Van Phat and Idico JSC
Assuming the 90 days trading horizon Van Phat Hung is expected to under-perform the Idico JSC. In addition to that, Van Phat is 1.34 times more volatile than Idico JSC. It trades about -0.15 of its total potential returns per unit of risk. Idico JSC is currently generating about -0.02 per unit of volatility. If you would invest 5,520,000 in Idico JSC on August 31, 2024 and sell it today you would lose (40,000) from holding Idico JSC or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Van Phat Hung vs. Idico JSC
Performance |
| Timeline |
| Van Phat Hung |
| Idico JSC |
Van Phat and Idico JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Van Phat and Idico JSC
The main advantage of trading using opposite Van Phat and Idico JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Van Phat position performs unexpectedly, Idico JSC 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 Idico JSC will offset losses from the drop in Idico JSC's long position.| Van Phat vs. Southern Rubber Industry | Van Phat vs. Hanoi Plastics JSC | Van Phat vs. Danang Rubber JSC | Van Phat vs. Sao Vang Rubber |
| Idico JSC vs. BIDV Insurance Corp | Idico JSC vs. Bao Ngoc Investment | Idico JSC vs. Saigon Telecommunication Technologies | Idico JSC vs. Pacific Petroleum Transportation |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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