Correlation Between Vincom Retail and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both Vincom Retail and Hochiminh City 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 Vincom Retail and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vincom Retail JSC and Hochiminh City Metal, you can compare the effects of market volatilities on Vincom Retail and Hochiminh City 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 Vincom Retail with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and Hochiminh City.
Diversification Opportunities for Vincom Retail and Hochiminh City
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vincom and Hochiminh is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of Vincom Retail i.e., Vincom Retail and Hochiminh City go up and down completely randomly.
Pair Corralation between Vincom Retail and Hochiminh City
Assuming the 90 days trading horizon Vincom Retail JSC is expected to generate 0.43 times more return on investment than Hochiminh City. However, Vincom Retail JSC is 2.34 times less risky than Hochiminh City. It trades about -0.19 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.31 per unit of risk. If you would invest 1,730,000 in Vincom Retail JSC on November 3, 2024 and sell it today you would lose (75,000) from holding Vincom Retail JSC or give up 4.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vincom Retail JSC vs. Hochiminh City Metal
Performance |
| Timeline |
| Vincom Retail JSC |
| Hochiminh City Metal |
Vincom Retail and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vincom Retail and Hochiminh City
The main advantage of trading using opposite Vincom Retail and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincom Retail position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| Vincom Retail vs. Hanoi Beer Alcohol | Vincom Retail vs. Asia Commercial Bank | Vincom Retail vs. PostTelecommunication Equipment | Vincom Retail vs. PetroVietnam Transportation Corp |
| Hochiminh City vs. Saigon Viendong Technology | Hochiminh City vs. FPT Digital Retail | Hochiminh City vs. Vietnam Technological And | Hochiminh City vs. Asia Commercial Bank |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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