Correlation Between Ha Noi and Vnsteel Vicasa

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

By analyzing existing cross correlation between Ha Noi Education and Vnsteel Vicasa JSC, you can compare the effects of market volatilities on Ha Noi and Vnsteel Vicasa 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 Ha Noi with a short position of Vnsteel Vicasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Noi and Vnsteel Vicasa.

Diversification Opportunities for Ha Noi and Vnsteel Vicasa

-0.76

Correlation Coefficient

Ha Noi  Vnsteel Vicasa

Pay attention - limited upside

The 3 months correlation between EID and Vnsteel is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ha Noi Education and Vnsteel Vicasa JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vnsteel Vicasa JSC and Ha Noi 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 Ha Noi Education are associated (or correlated) with Vnsteel Vicasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vnsteel Vicasa JSC has no effect on the direction of Ha Noi i.e., Ha Noi and Vnsteel Vicasa go up and down completely randomly.

Pair Corralation between Ha Noi and Vnsteel Vicasa

Assuming the 90 days trading horizon Ha Noi is expected to generate 7.84 times less return on investment than Vnsteel Vicasa. But when comparing it to its historical volatility, Ha Noi Education is 3.81 times less risky than Vnsteel Vicasa. It trades about 0.04 of its potential returns per unit of risk. Vnsteel Vicasa JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  999,000  in Vnsteel Vicasa JSC on September 29, 2024 and sell it today you would earn a total of  221,000  from holding Vnsteel Vicasa JSC or generate 22.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.03%
Values	Daily Returns

Ha Noi Education  vs.  Vnsteel Vicasa JSC

Ha Noi Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ha Noi Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Ha Noi is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vnsteel Vicasa JSC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vnsteel Vicasa JSC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vnsteel Vicasa displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ha Noi and Vnsteel Vicasa

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

The idea behind Ha Noi Education and Vnsteel Vicasa JSC 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.