Correlation Between Vietnam Manufacturing and Neo Neon

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

By analyzing existing cross correlation between Vietnam Manufacturing and and Neo Neon Holdings Limited, you can compare the effects of market volatilities on Vietnam Manufacturing and Neo Neon 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 Vietnam Manufacturing with a short position of Neo Neon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Manufacturing and Neo Neon.

Diversification Opportunities for Vietnam Manufacturing and Neo Neon

-0.05

Correlation Coefficient

Vietnam Manufacturing  Neo Neon

Good diversification

The 3 months correlation between Vietnam and Neo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Manufacturing and and Neo Neon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Neon Holdings and Vietnam Manufacturing 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 Vietnam Manufacturing and are associated (or correlated) with Neo Neon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Neon Holdings has no effect on the direction of Vietnam Manufacturing i.e., Vietnam Manufacturing and Neo Neon go up and down completely randomly.

Pair Corralation between Vietnam Manufacturing and Neo Neon

Assuming the 90 days trading horizon Vietnam Manufacturing and is expected to generate 0.67 times more return on investment than Neo Neon. However, Vietnam Manufacturing and is 1.48 times less risky than Neo Neon. It trades about -0.23 of its potential returns per unit of risk. Neo Neon Holdings Limited is currently generating about -0.34 per unit of risk. If you would invest  779.00  in Vietnam Manufacturing and on February 3, 2024 and sell it today you would lose (39.00) from holding Vietnam Manufacturing and or give up 5.01% of portfolio value over 90 days.

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

Vietnam Manufacturing and  vs.  Neo Neon Holdings Limited

Vietnam Manufacturing and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vietnam Manufacturing and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Vietnam Manufacturing is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Neo Neon Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Neon Holdings Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Neo Neon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vietnam Manufacturing and Neo Neon

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

The idea behind Vietnam Manufacturing and and Neo Neon Holdings Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.