Correlation Between Vina2 Investment and Duong Hieu

Can any of the company-specific risk be diversified away by investing in both Vina2 Investment 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 Vina2 Investment and Duong Hieu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vina2 Investment and and Duong Hieu Trading, you can compare the effects of market volatilities on Vina2 Investment 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 Vina2 Investment with a short position of Duong Hieu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Duong Hieu.

Diversification Opportunities for Vina2 Investment and Duong Hieu

0.01

Correlation Coefficient

Vina2 Investment  Duong Hieu

Significant diversification

The 3 months correlation between Vina2 and Duong is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and 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 Vina2 Investment 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 Vina2 Investment and 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 Vina2 Investment i.e., Vina2 Investment and Duong Hieu go up and down completely randomly.

Pair Corralation between Vina2 Investment and Duong Hieu

Assuming the 90 days trading horizon Vina2 Investment and is expected to under-perform the Duong Hieu. But the stock apears to be less risky and, when comparing its historical volatility, Vina2 Investment and is 1.13 times less risky than Duong Hieu. The stock trades about -0.08 of its potential returns per unit of risk. The Duong Hieu Trading is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  820,000  in Duong Hieu Trading on October 15, 2024 and sell it today you would lose (10,000) from holding Duong Hieu Trading or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Vina2 Investment and  vs.  Duong Hieu Trading

Vina2 Investment

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vina2 Investment and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vina2 Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Duong Hieu Trading

Risk-Adjusted Performance

0 of 100

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

Pair Trading with Vina2 Investment and Duong Hieu

The main advantage of trading using opposite Vina2 Investment and Duong Hieu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment 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 Vina2 Investment and 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.