Correlation Between VIETNAM ENTERPRISE and Panasonic Corp

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

By analyzing existing cross correlation between VIETNAM ENTERPRISE INV and Panasonic Corp, you can compare the effects of market volatilities on VIETNAM ENTERPRISE and Panasonic Corp 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 ENTERPRISE with a short position of Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIETNAM ENTERPRISE and Panasonic Corp.

Diversification Opportunities for VIETNAM ENTERPRISE and Panasonic Corp

-0.75

Correlation Coefficient

VIETNAM ENTERPRISE  Panasonic Corp

Pay attention - limited upside

The 3 months correlation between VIETNAM and Panasonic is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding VIETNAM ENTERPRISE INV and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp and VIETNAM ENTERPRISE 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 ENTERPRISE INV are associated (or correlated) with Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of VIETNAM ENTERPRISE i.e., VIETNAM ENTERPRISE and Panasonic Corp go up and down completely randomly.

Pair Corralation between VIETNAM ENTERPRISE and Panasonic Corp

Assuming the 90 days horizon VIETNAM ENTERPRISE INV is expected to generate 0.71 times more return on investment than Panasonic Corp. However, VIETNAM ENTERPRISE INV is 1.4 times less risky than Panasonic Corp. It trades about 0.29 of its potential returns per unit of risk. Panasonic Corp is currently generating about -0.08 per unit of risk. If you would invest  575.00  in VIETNAM ENTERPRISE INV on April 23, 2025 and sell it today you would earn a total of  185.00  from holding VIETNAM ENTERPRISE INV or generate 32.17% return on investment over 90 days.

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

VIETNAM ENTERPRISE INV  vs.  Panasonic Corp

VIETNAM ENTERPRISE INV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VIETNAM ENTERPRISE INV are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, VIETNAM ENTERPRISE reported solid returns over the last few months and may actually be approaching a breakup point.

Panasonic Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panasonic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with VIETNAM ENTERPRISE and Panasonic Corp

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

The idea behind VIETNAM ENTERPRISE INV and Panasonic Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.