Correlation Between VietinBank Securities and LDG Investment
Can any of the company-specific risk be diversified away by investing in both VietinBank Securities and LDG Investment 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 LDG Investment 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 LDG Investment JSC, you can compare the effects of market volatilities on VietinBank Securities and LDG Investment 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 LDG Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VietinBank Securities and LDG Investment.
Diversification Opportunities for VietinBank Securities and LDG Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VietinBank and LDG is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC and LDG Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LDG Investment JSC 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 LDG Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LDG Investment JSC has no effect on the direction of VietinBank Securities i.e., VietinBank Securities and LDG Investment go up and down completely randomly.
Pair Corralation between VietinBank Securities and LDG Investment
Assuming the 90 days trading horizon VietinBank Securities is expected to generate 1.58 times less return on investment than LDG Investment. But when comparing it to its historical volatility, VietinBank Securities JSC is 1.1 times less risky than LDG Investment. It trades about 0.03 of its potential returns per unit of risk. LDG Investment JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 185,000 in LDG Investment JSC on September 25, 2024 and sell it today you would earn a total of 3,000 from holding LDG Investment JSC or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
VietinBank Securities JSC vs. LDG Investment JSC
Performance |
Timeline |
VietinBank Securities JSC |
LDG Investment JSC |
VietinBank Securities and LDG Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VietinBank Securities and LDG Investment
The main advantage of trading using opposite VietinBank Securities and LDG Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VietinBank Securities position performs unexpectedly, LDG Investment 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 LDG Investment will offset losses from the drop in LDG Investment's long position.VietinBank Securities vs. FIT INVEST JSC | VietinBank Securities vs. Damsan JSC | VietinBank Securities vs. An Phat Plastic | VietinBank Securities vs. Alphanam ME |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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