Correlation Between Viet Thanh and Danang Education
Can any of the company-specific risk be diversified away by investing in both Viet Thanh and Danang Education 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 Danang Education 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 Danang Education Investment, you can compare the effects of market volatilities on Viet Thanh and Danang Education 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 Danang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Danang Education.
Diversification Opportunities for Viet Thanh and Danang Education
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Viet and Danang is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Danang Education Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Education Inv 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 Danang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Education Inv has no effect on the direction of Viet Thanh i.e., Viet Thanh and Danang Education go up and down completely randomly.
Pair Corralation between Viet Thanh and Danang Education
Assuming the 90 days trading horizon Viet Thanh is expected to generate 1.17 times less return on investment than Danang Education. But when comparing it to its historical volatility, Viet Thanh Plastic is 1.7 times less risky than Danang Education. It trades about 0.08 of its potential returns per unit of risk. Danang Education Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,478,034 in Danang Education Investment on August 29, 2024 and sell it today you would earn a total of 591,966 from holding Danang Education Investment or generate 40.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.6% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Danang Education Investment
Performance |
| Timeline |
| Viet Thanh Plastic |
| Danang Education Inv |
Viet Thanh and Danang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Danang Education
The main advantage of trading using opposite Viet Thanh and Danang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh position performs unexpectedly, Danang Education 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 Danang Education will offset losses from the drop in Danang Education's long position.| Viet Thanh vs. Military Insurance Corp | Viet Thanh vs. Petrolimex Petrochemical JSC | Viet Thanh vs. South Basic Chemicals | Viet Thanh vs. VietinBank Securities JSC |
| Danang Education vs. FIT INVEST JSC | Danang Education vs. Damsan JSC | Danang Education vs. An Phat Plastic | Danang Education vs. APG Securities Joint |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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