Correlation Between Bao Ngoc and Telecoms Informatics
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and Telecoms Informatics 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 Bao Ngoc and Telecoms Informatics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and Telecoms Informatics JSC, you can compare the effects of market volatilities on Bao Ngoc and Telecoms Informatics 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 Bao Ngoc with a short position of Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and Telecoms Informatics.
Diversification Opportunities for Bao Ngoc and Telecoms Informatics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bao and Telecoms is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and Telecoms Informatics go up and down completely randomly.
Pair Corralation between Bao Ngoc and Telecoms Informatics
Assuming the 90 days trading horizon Bao Ngoc is expected to generate 7.18 times less return on investment than Telecoms Informatics. In addition to that, Bao Ngoc is 1.56 times more volatile than Telecoms Informatics JSC. It trades about 0.01 of its total potential returns per unit of risk. Telecoms Informatics JSC is currently generating about 0.16 per unit of volatility. If you would invest 1,280,000 in Telecoms Informatics JSC on October 11, 2024 and sell it today you would earn a total of 80,000 from holding Telecoms Informatics JSC or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bao Ngoc Investment vs. Telecoms Informatics JSC
Performance |
| Timeline |
| Bao Ngoc Investment |
| Telecoms Informatics JSC |
Bao Ngoc and Telecoms Informatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and Telecoms Informatics
The main advantage of trading using opposite Bao Ngoc and Telecoms Informatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, Telecoms Informatics 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 Telecoms Informatics will offset losses from the drop in Telecoms Informatics' long position.| Bao Ngoc vs. Thong Nhat Rubber | Bao Ngoc vs. Transport and Industry | Bao Ngoc vs. Pacific Petroleum Transportation | Bao Ngoc vs. Vietnam Petroleum Transport |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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