Correlation Between Van Dien and Duyen Hai

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

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

Diversification Opportunities for Van Dien and Duyen Hai

-0.47

Correlation Coefficient

Van Dien  Duyen Hai

Very good diversification

The 3 months correlation between Van and Duyen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Van Dien Fused and Duyen Hai Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duyen Hai Multi and Van Dien 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 Van Dien Fused are associated (or correlated) with Duyen Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duyen Hai Multi has no effect on the direction of Van Dien i.e., Van Dien and Duyen Hai go up and down completely randomly.

Pair Corralation between Van Dien and Duyen Hai

Assuming the 90 days trading horizon Van Dien is expected to generate 2.98 times less return on investment than Duyen Hai. In addition to that, Van Dien is 1.78 times more volatile than Duyen Hai Multi. It trades about 0.04 of its total potential returns per unit of risk. Duyen Hai Multi is currently generating about 0.23 per unit of volatility. If you would invest  1,140,000  in Duyen Hai Multi on October 10, 2024 and sell it today you would earn a total of  165,000  from holding Duyen Hai Multi or generate 14.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.43%
Values	Daily Returns

Van Dien Fused  vs.  Duyen Hai Multi

Van Dien Fused

Risk-Adjusted Performance

0 of 100

Very Weak

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

Duyen Hai Multi

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Van Dien and Duyen Hai

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

The idea behind Van Dien Fused and Duyen Hai Multi 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.