Correlation Between Cotec Construction and Vietnam Dairy

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

By analyzing existing cross correlation between Cotec Construction JSC and Vietnam Dairy Products, you can compare the effects of market volatilities on Cotec Construction and Vietnam Dairy 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 Cotec Construction with a short position of Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Vietnam Dairy.

Diversification Opportunities for Cotec Construction and Vietnam Dairy

0.44

Correlation Coefficient

Cotec Construction  Vietnam Dairy

Very weak diversification

The 3 months correlation between Cotec and Vietnam is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products and Cotec Construction 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 Cotec Construction JSC are associated (or correlated) with Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Cotec Construction i.e., Cotec Construction and Vietnam Dairy go up and down completely randomly.

Pair Corralation between Cotec Construction and Vietnam Dairy

Assuming the 90 days trading horizon Cotec Construction is expected to generate 4.46 times less return on investment than Vietnam Dairy. In addition to that, Cotec Construction is 1.8 times more volatile than Vietnam Dairy Products. It trades about 0.02 of its total potential returns per unit of risk. Vietnam Dairy Products is currently generating about 0.16 per unit of volatility. If you would invest  5,495,470  in Vietnam Dairy Products on May 6, 2025 and sell it today you would earn a total of  624,530  from holding Vietnam Dairy Products or generate 11.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Cotec Construction JSC  vs.  Vietnam Dairy Products

Cotec Construction JSC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cotec Construction JSC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Cotec Construction is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vietnam Dairy Products

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Dairy Products are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Vietnam Dairy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Cotec Construction and Vietnam Dairy

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

The idea behind Cotec Construction JSC and Vietnam Dairy Products 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.