Correlation Between Investment and Vien Dong

Can any of the company-specific risk be diversified away by investing in both Investment and Vien Dong 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 Investment and Vien Dong into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Investment and Industrial and Vien Dong Investment, you can compare the effects of market volatilities on Investment and Vien Dong 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 Investment with a short position of Vien Dong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Vien Dong.

Diversification Opportunities for Investment and Vien Dong

0.49

Correlation Coefficient

Investment  Vien Dong

Very weak diversification

The 3 months correlation between Investment and Vien is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and Vien Dong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vien Dong Investment and Investment 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 Investment and Industrial are associated (or correlated) with Vien Dong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vien Dong Investment has no effect on the direction of Investment i.e., Investment and Vien Dong go up and down completely randomly.

Pair Corralation between Investment and Vien Dong

Assuming the 90 days trading horizon Investment and Industrial is expected to generate 0.8 times more return on investment than Vien Dong. However, Investment and Industrial is 1.25 times less risky than Vien Dong. It trades about -0.09 of its potential returns per unit of risk. Vien Dong Investment is currently generating about -0.09 per unit of risk. If you would invest  7,092,054  in Investment and Industrial on September 2, 2024 and sell it today you would lose (442,054) from holding Investment and Industrial or give up 6.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Investment and Industrial  vs.  Vien Dong Investment

Investment and Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment and Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vien Dong Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vien Dong Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Investment and Vien Dong

The main advantage of trading using opposite Investment and Vien Dong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Vien Dong 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 Vien Dong will offset losses from the drop in Vien Dong's long position.

The idea behind Investment and Industrial and Vien Dong Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.