Correlation Between VietinBank Securities and Dong Nai

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

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

Diversification Opportunities for VietinBank Securities and Dong Nai

-0.58

Correlation Coefficient

VietinBank Securities  Dong Nai

Excellent diversification

The 3 months correlation between VietinBank and Dong is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC and Dong Nai Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong Nai Plastic and VietinBank Securities 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 VietinBank Securities JSC are associated (or correlated) with Dong Nai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong Nai Plastic has no effect on the direction of VietinBank Securities i.e., VietinBank Securities and Dong Nai go up and down completely randomly.

Pair Corralation between VietinBank Securities and Dong Nai

Assuming the 90 days trading horizon VietinBank Securities JSC is expected to generate 0.54 times more return on investment than Dong Nai. However, VietinBank Securities JSC is 1.85 times less risky than Dong Nai. It trades about 0.17 of its potential returns per unit of risk. Dong Nai Plastic is currently generating about -0.04 per unit of risk. If you would invest  3,540,000  in VietinBank Securities JSC on December 23, 2024 and sell it today you would earn a total of  510,000  from holding VietinBank Securities JSC or generate 14.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.67%
Values	Daily Returns

VietinBank Securities JSC  vs.  Dong Nai Plastic

VietinBank Securities JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VietinBank Securities JSC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VietinBank Securities displayed solid returns over the last few months and may actually be approaching a breakup point.

Dong Nai Plastic

Risk-Adjusted Performance

Very Weak

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

Pair Trading with VietinBank Securities and Dong Nai

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

The idea behind VietinBank Securities JSC and Dong Nai Plastic 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.