Correlation Between CEO Group and Lien Viet

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

By analyzing existing cross correlation between CEO Group JSC and Lien Viet Post, you can compare the effects of market volatilities on CEO Group and Lien Viet 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 CEO Group with a short position of Lien Viet. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEO Group and Lien Viet.

Diversification Opportunities for CEO Group and Lien Viet

-0.77

Correlation Coefficient

CEO Group  Lien Viet

Pay attention - limited upside

The 3 months correlation between CEO and Lien is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Lien Viet Post in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Viet Post and CEO Group 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 CEO Group JSC are associated (or correlated) with Lien Viet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Viet Post has no effect on the direction of CEO Group i.e., CEO Group and Lien Viet go up and down completely randomly.

Pair Corralation between CEO Group and Lien Viet

Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Lien Viet. But the stock apears to be less risky and, when comparing its historical volatility, CEO Group JSC is 1.11 times less risky than Lien Viet. The stock trades about -0.24 of its potential returns per unit of risk. The Lien Viet Post is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  2,932,400  in Lien Viet Post on October 26, 2024 and sell it today you would earn a total of  652,600  from holding Lien Viet Post or generate 22.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

CEO Group JSC  vs.  Lien Viet Post

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Lien Viet Post

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lien Viet Post are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Lien Viet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEO Group and Lien Viet

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

The idea behind CEO Group JSC and Lien Viet Post 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.