Correlation Between Duyen Hai and Van Dien

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

By analyzing existing cross correlation between Duyen Hai Multi and Van Dien Fused, you can compare the effects of market volatilities on Duyen Hai and Van Dien 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 Duyen Hai with a short position of Van Dien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duyen Hai and Van Dien.

Diversification Opportunities for Duyen Hai and Van Dien

0.0

Correlation Coefficient

Duyen Hai  Van Dien

Pay attention - limited upside

The 3 months correlation between Duyen and Van is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Duyen Hai Multi and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused and Duyen Hai 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 Duyen Hai Multi are associated (or correlated) with Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of Duyen Hai i.e., Duyen Hai and Van Dien go up and down completely randomly.

Pair Corralation between Duyen Hai and Van Dien

Assuming the 90 days trading horizon Duyen Hai Multi is expected to under-perform the Van Dien. But the stock apears to be less risky and, when comparing its historical volatility, Duyen Hai Multi is 1.92 times less risky than Van Dien. The stock trades about -0.06 of its potential returns per unit of risk. The Van Dien Fused is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,250,000  in Van Dien Fused on December 20, 2024 and sell it today you would earn a total of  570,000  from holding Van Dien Fused or generate 45.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	63.79%
Values	Daily Returns

Duyen Hai Multi  vs.  Van Dien Fused

Duyen Hai Multi

Risk-Adjusted Performance

Very Weak

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

Van Dien Fused

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Van Dien Fused are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Van Dien displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duyen Hai and Van Dien

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

The idea behind Duyen Hai Multi and Van Dien Fused 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.