Correlation Between Vu Dang and CEO Group

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

By analyzing existing cross correlation between Vu Dang Investment and CEO Group JSC, you can compare the effects of market volatilities on Vu Dang and CEO Group 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 Vu Dang with a short position of CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and CEO Group.

Diversification Opportunities for Vu Dang and CEO Group

0.52

Correlation Coefficient

Vu Dang  CEO Group

Very weak diversification

The 3 months correlation between SVD and CEO is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and Vu Dang 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 Vu Dang Investment are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of Vu Dang i.e., Vu Dang and CEO Group go up and down completely randomly.

Pair Corralation between Vu Dang and CEO Group

Assuming the 90 days trading horizon Vu Dang is expected to generate 4.97 times less return on investment than CEO Group. But when comparing it to its historical volatility, Vu Dang Investment is 1.87 times less risky than CEO Group. It trades about 0.12 of its potential returns per unit of risk. CEO Group JSC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,250,000  in CEO Group JSC on December 4, 2024 and sell it today you would earn a total of  210,000  from holding CEO Group JSC or generate 16.8% return on investment over 90 days.

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

Vu Dang Investment  vs.  CEO Group JSC

Vu Dang Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vu Dang Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

CEO Group JSC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEO Group JSC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CEO Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vu Dang and CEO Group

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

The idea behind Vu Dang Investment and CEO Group JSC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.