Correlation Between VIETNAM ENTERPRISE and Freshpet

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

By analyzing existing cross correlation between VIETNAM ENTERPRISE INV and Freshpet, you can compare the effects of market volatilities on VIETNAM ENTERPRISE and Freshpet 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 VIETNAM ENTERPRISE with a short position of Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIETNAM ENTERPRISE and Freshpet.

Diversification Opportunities for VIETNAM ENTERPRISE and Freshpet

-0.45

Correlation Coefficient

VIETNAM ENTERPRISE  Freshpet

Very good diversification

The 3 months correlation between VIETNAM and Freshpet is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding VIETNAM ENTERPRISE INV and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet and VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE INV are associated (or correlated) with Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of VIETNAM ENTERPRISE i.e., VIETNAM ENTERPRISE and Freshpet go up and down completely randomly.

Pair Corralation between VIETNAM ENTERPRISE and Freshpet

Assuming the 90 days horizon VIETNAM ENTERPRISE is expected to generate 20.25 times less return on investment than Freshpet. But when comparing it to its historical volatility, VIETNAM ENTERPRISE INV is 2.16 times less risky than Freshpet. It trades about 0.01 of its potential returns per unit of risk. Freshpet is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11,945  in Freshpet on September 23, 2024 and sell it today you would earn a total of  1,555  from holding Freshpet or generate 13.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VIETNAM ENTERPRISE INV  vs.  Freshpet

VIETNAM ENTERPRISE INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIETNAM ENTERPRISE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIETNAM ENTERPRISE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Freshpet

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freshpet are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Freshpet is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VIETNAM ENTERPRISE and Freshpet

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

The idea behind VIETNAM ENTERPRISE INV and Freshpet 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.