Correlation Between Van Dien and Vietnam Maritime

Can any of the company-specific risk be diversified away by investing in both Van Dien and Vietnam Maritime 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 Vietnam Maritime 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 Vietnam Maritime Development, you can compare the effects of market volatilities on Van Dien and Vietnam Maritime 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 Vietnam Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van Dien and Vietnam Maritime.

Diversification Opportunities for Van Dien and Vietnam Maritime

0.0

Correlation Coefficient

Van Dien  Vietnam Maritime

Pay attention - limited upside

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

Pair Corralation between Van Dien and Vietnam Maritime

If you would invest  2,190,000  in Vietnam Maritime Development on December 20, 2024 and sell it today you would earn a total of  600,000  from holding Vietnam Maritime Development or generate 27.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.03%
Values	Daily Returns

Van Dien Fused  vs.  Vietnam Maritime Development

Van Dien Fused

Risk-Adjusted Performance

Solid

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 current stock price disarray, may contribute to short-term losses for the investors.

Vietnam Maritime Dev

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Maritime Development are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vietnam Maritime displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Van Dien and Vietnam Maritime

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

The idea behind Van Dien Fused and Vietnam Maritime Development 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 Transaction History module to view history of all your transactions and understand their impact on performance.