Correlation Between Innovative Technology and Vietnam National
Can any of the company-specific risk be diversified away by investing in both Innovative Technology and Vietnam National 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 Innovative Technology and Vietnam National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Technology Development and Vietnam National Reinsurance, you can compare the effects of market volatilities on Innovative Technology and Vietnam National 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 Innovative Technology with a short position of Vietnam National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and Vietnam National.
Diversification Opportunities for Innovative Technology and Vietnam National
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovative and Vietnam is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm and Vietnam National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam National Rei and Innovative Technology 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 Innovative Technology Development are associated (or correlated) with Vietnam National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam National Rei has no effect on the direction of Innovative Technology i.e., Innovative Technology and Vietnam National go up and down completely randomly.
Pair Corralation between Innovative Technology and Vietnam National
Assuming the 90 days trading horizon Innovative Technology Development is expected to generate 2.33 times more return on investment than Vietnam National. However, Innovative Technology is 2.33 times more volatile than Vietnam National Reinsurance. It trades about 0.07 of its potential returns per unit of risk. Vietnam National Reinsurance is currently generating about 0.0 per unit of risk. If you would invest 1,200,000 in Innovative Technology Development on September 30, 2024 and sell it today you would earn a total of 100,000 from holding Innovative Technology Development or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.48% |
Values | Daily Returns |
Innovative Technology Developm vs. Vietnam National Reinsurance
Performance |
Timeline |
Innovative Technology |
Vietnam National Rei |
Innovative Technology and Vietnam National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innovative Technology and Vietnam National
The main advantage of trading using opposite Innovative Technology and Vietnam National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Technology position performs unexpectedly, Vietnam National 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 National will offset losses from the drop in Vietnam National's long position.Innovative Technology vs. PVI Reinsurance Corp | Innovative Technology vs. Materials Petroleum JSC | Innovative Technology vs. An Phat Plastic | Innovative Technology vs. Danang Rubber JSC |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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