Correlation Between Din Capital and Vietnam Dairy

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

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

Diversification Opportunities for Din Capital and Vietnam Dairy

-0.86

Correlation Coefficient

Din Capital  Vietnam Dairy

Pay attention - limited upside

The 3 months correlation between Din and Vietnam is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products and Din Capital 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 Din Capital Investment are associated (or correlated) with Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Din Capital i.e., Din Capital and Vietnam Dairy go up and down completely randomly.

Pair Corralation between Din Capital and Vietnam Dairy

Assuming the 90 days trading horizon Din Capital Investment is expected to generate 1.39 times more return on investment than Vietnam Dairy. However, Din Capital is 1.39 times more volatile than Vietnam Dairy Products. It trades about -0.04 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.1 per unit of risk. If you would invest  1,020,000  in Din Capital Investment on October 10, 2024 and sell it today you would lose (10,000) from holding Din Capital Investment or give up 0.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Din Capital Investment  vs.  Vietnam Dairy Products

Din Capital Investment

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Vietnam Dairy Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vietnam Dairy Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary 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 Din Capital and Vietnam Dairy

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

The idea behind Din Capital Investment and Vietnam Dairy Products 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.