Correlation Between Vincom Retail and Thong Nhat
Can any of the company-specific risk be diversified away by investing in both Vincom Retail and Thong Nhat 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 Thong Nhat 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 Thong Nhat Rubber, you can compare the effects of market volatilities on Vincom Retail and Thong Nhat 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 Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and Thong Nhat.
Diversification Opportunities for Vincom Retail and Thong Nhat
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vincom and Thong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Thong Nhat Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thong Nhat Rubber 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 Thong Nhat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thong Nhat Rubber has no effect on the direction of Vincom Retail i.e., Vincom Retail and Thong Nhat go up and down completely randomly.
Pair Corralation between Vincom Retail and Thong Nhat
Assuming the 90 days trading horizon Vincom Retail JSC is expected to under-perform the Thong Nhat. But the stock apears to be less risky and, when comparing its historical volatility, Vincom Retail JSC is 4.35 times less risky than Thong Nhat. The stock trades about -0.17 of its potential returns per unit of risk. The Thong Nhat Rubber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,470,000 in Thong Nhat Rubber on October 30, 2024 and sell it today you would lose (20,000) from holding Thong Nhat Rubber or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.41% |
| Values | Daily Returns |
Vincom Retail JSC vs. Thong Nhat Rubber
Performance |
| Timeline |
| Vincom Retail JSC |
| Thong Nhat Rubber |
Vincom Retail and Thong Nhat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vincom Retail and Thong Nhat
The main advantage of trading using opposite Vincom Retail and Thong Nhat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincom Retail position performs unexpectedly, Thong Nhat 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 Thong Nhat will offset losses from the drop in Thong Nhat's long position.| Vincom Retail vs. Construction And Investment | Vincom Retail vs. Thanh Dat Investment | Vincom Retail vs. Dinhvu Port Investment | Vincom Retail vs. 577 Investment Corp |
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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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