Correlation Between Vinacomin NuiBeo and Dong A

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

By analyzing existing cross correlation between Vinacomin NuiBeo Coal and Dong A Hotel, you can compare the effects of market volatilities on Vinacomin NuiBeo and Dong A 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 Vinacomin NuiBeo with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinacomin NuiBeo and Dong A.

Diversification Opportunities for Vinacomin NuiBeo and Dong A

0.19

Correlation Coefficient

Vinacomin NuiBeo  Dong A

Average diversification

The 3 months correlation between Vinacomin and Dong is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vinacomin NuiBeo Coal and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and Vinacomin NuiBeo 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 Vinacomin NuiBeo Coal are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Vinacomin NuiBeo i.e., Vinacomin NuiBeo and Dong A go up and down completely randomly.

Pair Corralation between Vinacomin NuiBeo and Dong A

Assuming the 90 days trading horizon Vinacomin NuiBeo Coal is expected to generate 1.15 times more return on investment than Dong A. However, Vinacomin NuiBeo is 1.15 times more volatile than Dong A Hotel. It trades about 0.03 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.02 per unit of risk. If you would invest  762,110  in Vinacomin NuiBeo Coal on September 29, 2024 and sell it today you would earn a total of  177,890  from holding Vinacomin NuiBeo Coal or generate 23.34% return on investment over 90 days.

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

Vinacomin NuiBeo Coal  vs.  Dong A Hotel

Vinacomin NuiBeo Coal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinacomin NuiBeo Coal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dong A Hotel

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dong A Hotel are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Dong A may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vinacomin NuiBeo and Dong A

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

The idea behind Vinacomin NuiBeo Coal and Dong A Hotel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.