Correlation Between Book and Vietnam JSCmmercial

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

By analyzing existing cross correlation between Book And Educational and Vietnam JSCmmercial Bank, you can compare the effects of market volatilities on Book and Vietnam JSCmmercial 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 Book with a short position of Vietnam JSCmmercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Book and Vietnam JSCmmercial.

Diversification Opportunities for Book and Vietnam JSCmmercial

0.1

Correlation Coefficient

Book  Vietnam JSCmmercial

Average diversification

The 3 months correlation between Book and Vietnam is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Book And Educational and Vietnam JSCmmercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam JSCmmercial Bank and Book 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 Book And Educational are associated (or correlated) with Vietnam JSCmmercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam JSCmmercial Bank has no effect on the direction of Book i.e., Book and Vietnam JSCmmercial go up and down completely randomly.

Pair Corralation between Book and Vietnam JSCmmercial

Assuming the 90 days trading horizon Book is expected to generate 1.15 times less return on investment than Vietnam JSCmmercial. In addition to that, Book is 5.63 times more volatile than Vietnam JSCmmercial Bank. It trades about 0.05 of its total potential returns per unit of risk. Vietnam JSCmmercial Bank is currently generating about 0.35 per unit of volatility. If you would invest  3,335,000  in Vietnam JSCmmercial Bank on September 20, 2024 and sell it today you would earn a total of  285,000  from holding Vietnam JSCmmercial Bank or generate 8.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Book And Educational  vs.  Vietnam JSCmmercial Bank

Book And Educational

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vietnam JSCmmercial Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam JSCmmercial Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Vietnam JSCmmercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Book and Vietnam JSCmmercial

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

The idea behind Book And Educational and Vietnam JSCmmercial Bank 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.