Correlation Between Vinda International and Hengan International

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

By analyzing existing cross correlation between Vinda International Holdings and Hengan International Group, you can compare the effects of market volatilities on Vinda International and Hengan International 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 Vinda International with a short position of Hengan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinda International and Hengan International.

Diversification Opportunities for Vinda International and Hengan International

0.0

Correlation Coefficient

Vinda International  Hengan International

Pay attention - limited upside

The 3 months correlation between Vinda and Hengan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vinda International Holdings and Hengan International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengan International and Vinda International 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 Vinda International Holdings are associated (or correlated) with Hengan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengan International has no effect on the direction of Vinda International i.e., Vinda International and Hengan International go up and down completely randomly.

Pair Corralation between Vinda International and Hengan International

If you would invest  2,167  in Vinda International Holdings on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Vinda International Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	74.72%
Values	Daily Returns

Vinda International Holdings  vs.  Hengan International Group

Vinda International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinda International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Vinda International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hengan International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hengan International Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, Hengan International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vinda International and Hengan International

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

The idea behind Vinda International Holdings and Hengan International Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.