Correlation Between Vincom Retail and Vu Dang

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

By analyzing existing cross correlation between Vincom Retail JSC and Vu Dang Investment, you can compare the effects of market volatilities on Vincom Retail and Vu Dang 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 Vincom Retail with a short position of Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and Vu Dang.

Diversification Opportunities for Vincom Retail and Vu Dang

-0.34

Correlation Coefficient

Vincom Retail  Vu Dang

Very good diversification

The 3 months correlation between Vincom and SVD is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Vincom Retail i.e., Vincom Retail and Vu Dang go up and down completely randomly.

Pair Corralation between Vincom Retail and Vu Dang

Assuming the 90 days trading horizon Vincom Retail JSC is expected to under-perform the Vu Dang. But the stock apears to be less risky and, when comparing its historical volatility, Vincom Retail JSC is 2.14 times less risky than Vu Dang. The stock trades about -0.14 of its potential returns per unit of risk. The Vu Dang Investment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  330,000  in Vu Dang Investment on September 28, 2024 and sell it today you would lose (9,000) from holding Vu Dang Investment or give up 2.73% of portfolio value over 90 days.

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

Vincom Retail JSC  vs.  Vu Dang Investment

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincom Retail JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Vu Dang Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vincom Retail and Vu Dang

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

The idea behind Vincom Retail JSC and Vu Dang Investment 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.