Correlation Between Viet Nam and Binh Duong
Can any of the company-specific risk be diversified away by investing in both Viet Nam and Binh Duong 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 Viet Nam and Binh Duong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viet Nam Construction and Binh Duong Construction, you can compare the effects of market volatilities on Viet Nam and Binh Duong 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 Viet Nam with a short position of Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viet Nam and Binh Duong.
Diversification Opportunities for Viet Nam and Binh Duong
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Viet and Binh is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Viet Nam Construction and Binh Duong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Construction and Viet Nam 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 Viet Nam Construction are associated (or correlated) with Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Construction has no effect on the direction of Viet Nam i.e., Viet Nam and Binh Duong go up and down completely randomly.
Pair Corralation between Viet Nam and Binh Duong
Assuming the 90 days trading horizon Viet Nam Construction is expected to generate 2.56 times more return on investment than Binh Duong. However, Viet Nam is 2.56 times more volatile than Binh Duong Construction. It trades about 0.05 of its potential returns per unit of risk. Binh Duong Construction is currently generating about 0.06 per unit of risk. If you would invest 935,404 in Viet Nam Construction on October 27, 2024 and sell it today you would earn a total of 294,596 from holding Viet Nam Construction or generate 31.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 44.87% |
Values | Daily Returns |
Viet Nam Construction vs. Binh Duong Construction
Performance |
Timeline |
Viet Nam Construction |
Binh Duong Construction |
Viet Nam and Binh Duong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Viet Nam and Binh Duong
The main advantage of trading using opposite Viet Nam and Binh Duong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viet Nam position performs unexpectedly, Binh Duong 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 Binh Duong will offset losses from the drop in Binh Duong's long position.Viet Nam vs. Hoang Huy Investment | Viet Nam vs. PC3 Investment JSC | Viet Nam vs. Thanh Dat Investment | Viet Nam vs. Tri Viet Management |
Binh Duong vs. Saigon Telecommunication Technologies | Binh Duong vs. Thong Nhat Rubber | Binh Duong vs. Riverway Management JSC | Binh Duong vs. POST TELECOMMU |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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