Correlation Between Viet Thanh and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both Viet Thanh and Southern Rubber 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 Viet Thanh and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Thanh Plastic and Southern Rubber Industry, you can compare the effects of market volatilities on Viet Thanh and Southern Rubber 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 Viet Thanh with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Southern Rubber.
Diversification Opportunities for Viet Thanh and Southern Rubber
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viet and Southern is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and Viet Thanh 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 Viet Thanh Plastic are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of Viet Thanh i.e., Viet Thanh and Southern Rubber go up and down completely randomly.
Pair Corralation between Viet Thanh and Southern Rubber
Assuming the 90 days trading horizon Viet Thanh is expected to generate 7.35 times less return on investment than Southern Rubber. But when comparing it to its historical volatility, Viet Thanh Plastic is 1.9 times less risky than Southern Rubber. It trades about 0.07 of its potential returns per unit of risk. Southern Rubber Industry is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,135,000 in Southern Rubber Industry on August 30, 2024 and sell it today you would earn a total of 235,000 from holding Southern Rubber Industry or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Southern Rubber Industry
Performance |
| Timeline |
| Viet Thanh Plastic |
| Southern Rubber Industry |
Viet Thanh and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Southern Rubber
The main advantage of trading using opposite Viet Thanh and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh position performs unexpectedly, Southern Rubber 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 Southern Rubber will offset losses from the drop in Southern Rubber's long position.| Viet Thanh vs. FIT INVEST JSC | Viet Thanh vs. Damsan JSC | Viet Thanh vs. An Phat Plastic | Viet Thanh vs. Alphanam ME |
| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber vs. Alphanam ME |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |