Correlation Between Viet Thanh and Vietnam Construction
Can any of the company-specific risk be diversified away by investing in both Viet Thanh and Vietnam Construction 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 Vietnam Construction 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 Vietnam Construction JSC, you can compare the effects of market volatilities on Viet Thanh and Vietnam Construction 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 Vietnam Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Thanh and Vietnam Construction.
Diversification Opportunities for Viet Thanh and Vietnam Construction
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viet and Vietnam is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Vietnam Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Construction JSC 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 Vietnam Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Construction JSC has no effect on the direction of Viet Thanh i.e., Viet Thanh and Vietnam Construction go up and down completely randomly.
Pair Corralation between Viet Thanh and Vietnam Construction
Assuming the 90 days trading horizon Viet Thanh Plastic is expected to generate 2.48 times more return on investment than Vietnam Construction. However, Viet Thanh is 2.48 times more volatile than Vietnam Construction JSC. It trades about 0.07 of its potential returns per unit of risk. Vietnam Construction JSC is currently generating about 0.17 per unit of risk. If you would invest 1,630,000 in Viet Thanh Plastic on August 30, 2024 and sell it today you would earn a total of 40,000 from holding Viet Thanh Plastic or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viet Thanh Plastic vs. Vietnam Construction JSC
Performance |
| Timeline |
| Viet Thanh Plastic |
| Vietnam Construction JSC |
Viet Thanh and Vietnam Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viet Thanh and Vietnam Construction
The main advantage of trading using opposite Viet Thanh and Vietnam Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Thanh position performs unexpectedly, Vietnam Construction 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 Vietnam Construction will offset losses from the drop in Vietnam Construction'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 |
| Vietnam Construction vs. Danang Rubber JSC | Vietnam Construction vs. Tay Ninh Rubber | Vietnam Construction vs. Viet Thanh Plastic | Vietnam Construction vs. Vinhomes JSC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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