Correlation Between Leverage Shares and VinaCapital Vietnam

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

By analyzing existing cross correlation between Leverage Shares 2x and VinaCapital Vietnam Opportunity, you can compare the effects of market volatilities on Leverage Shares and VinaCapital Vietnam 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 Leverage Shares with a short position of VinaCapital Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and VinaCapital Vietnam.

Diversification Opportunities for Leverage Shares and VinaCapital Vietnam

-0.15

Correlation Coefficient

Leverage Shares  VinaCapital Vietnam

Good diversification

The 3 months correlation between Leverage and VinaCapital is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and VinaCapital Vietnam Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinaCapital Vietnam and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with VinaCapital Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinaCapital Vietnam has no effect on the direction of Leverage Shares i.e., Leverage Shares and VinaCapital Vietnam go up and down completely randomly.

Pair Corralation between Leverage Shares and VinaCapital Vietnam

Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 2.35 times more return on investment than VinaCapital Vietnam. However, Leverage Shares is 2.35 times more volatile than VinaCapital Vietnam Opportunity. It trades about 0.14 of its potential returns per unit of risk. VinaCapital Vietnam Opportunity is currently generating about -0.03 per unit of risk. If you would invest  4,852  in Leverage Shares 2x on September 23, 2024 and sell it today you would earn a total of  888.00  from holding Leverage Shares 2x or generate 18.3% return on investment over 90 days.

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

Leverage Shares 2x  vs.  VinaCapital Vietnam Opportunit

Leverage Shares 2x

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leverage Shares 2x are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Leverage Shares unveiled solid returns over the last few months and may actually be approaching a breakup point.

VinaCapital Vietnam

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VinaCapital Vietnam Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, VinaCapital Vietnam is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Leverage Shares and VinaCapital Vietnam

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

The idea behind Leverage Shares 2x and VinaCapital Vietnam Opportunity 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.