Correlation Between Blackrock Energy and VinaCapital Vietnam

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

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

Diversification Opportunities for Blackrock Energy and VinaCapital Vietnam

-0.3

Correlation Coefficient

Blackrock Energy  VinaCapital Vietnam

Very good diversification

The 3 months correlation between Blackrock and VinaCapital is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Energy and and VinaCapital Vietnam Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinaCapital Vietnam and Blackrock Energy 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 Blackrock Energy and 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 Blackrock Energy i.e., Blackrock Energy and VinaCapital Vietnam go up and down completely randomly.

Pair Corralation between Blackrock Energy and VinaCapital Vietnam

Assuming the 90 days trading horizon Blackrock Energy and is expected to generate 1.61 times more return on investment than VinaCapital Vietnam. However, Blackrock Energy is 1.61 times more volatile than VinaCapital Vietnam Opportunity. It trades about 0.13 of its potential returns per unit of risk. VinaCapital Vietnam Opportunity is currently generating about -0.08 per unit of risk. If you would invest  11,044  in Blackrock Energy and on September 4, 2024 and sell it today you would earn a total of  1,156  from holding Blackrock Energy and or generate 10.47% return on investment over 90 days.

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

Blackrock Energy and  vs.  VinaCapital Vietnam Opportunit

Blackrock Energy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Energy and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Blackrock Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blackrock Energy and VinaCapital Vietnam

The main advantage of trading using opposite Blackrock Energy and VinaCapital Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Energy 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 Blackrock Energy and 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.