Correlation Between Vu Dang and Duong Hieu

Can any of the company-specific risk be diversified away by investing in both Vu Dang and Duong Hieu 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 Duong Hieu 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 Duong Hieu Trading, you can compare the effects of market volatilities on Vu Dang and Duong Hieu 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 Duong Hieu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vu Dang and Duong Hieu.

Diversification Opportunities for Vu Dang and Duong Hieu

-0.1

Correlation Coefficient

Vu Dang  Duong Hieu

Good diversification

The 3 months correlation between SVD and Duong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and Duong Hieu Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duong Hieu Trading 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 Duong Hieu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duong Hieu Trading has no effect on the direction of Vu Dang i.e., Vu Dang and Duong Hieu go up and down completely randomly.

Pair Corralation between Vu Dang and Duong Hieu

Assuming the 90 days trading horizon Vu Dang Investment is expected to generate 0.75 times more return on investment than Duong Hieu. However, Vu Dang Investment is 1.33 times less risky than Duong Hieu. It trades about 0.01 of its potential returns per unit of risk. Duong Hieu Trading is currently generating about -0.07 per unit of risk. If you would invest  328,000  in Vu Dang Investment on December 19, 2024 and sell it today you would earn a total of  0.00  from holding Vu Dang Investment or generate 0.0% return on investment over 90 days.

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

Vu Dang Investment  vs.  Duong Hieu Trading

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 very healthy fundamental indicators, Vu Dang is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Duong Hieu Trading

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duong Hieu Trading 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 Vu Dang and Duong Hieu

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

The idea behind Vu Dang Investment and Duong Hieu Trading 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.