Correlation Between Cotec Construction and Viettel Construction
Can any of the company-specific risk be diversified away by investing in both Cotec Construction and Viettel Construction 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 Viettel Construction 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 Viettel Construction JSC, you can compare the effects of market volatilities on Cotec Construction and Viettel Construction 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 Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cotec Construction and Viettel Construction.
Diversification Opportunities for Cotec Construction and Viettel Construction
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cotec and Viettel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cotec Construction JSC and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel Construction JSC 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 Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of Cotec Construction i.e., Cotec Construction and Viettel Construction go up and down completely randomly.
Pair Corralation between Cotec Construction and Viettel Construction
Assuming the 90 days trading horizon Cotec Construction JSC is expected to generate 0.68 times more return on investment than Viettel Construction. However, Cotec Construction JSC is 1.47 times less risky than Viettel Construction. It trades about -0.05 of its potential returns per unit of risk. Viettel Construction JSC is currently generating about -0.14 per unit of risk. If you would invest 6,700,000 in Cotec Construction JSC on August 31, 2024 and sell it today you would lose (142,000) from holding Cotec Construction JSC or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cotec Construction JSC vs. Viettel Construction JSC
Performance |
| Timeline |
| Cotec Construction JSC |
| Viettel Construction JSC |
Cotec Construction and Viettel Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cotec Construction and Viettel Construction
The main advantage of trading using opposite Cotec Construction and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cotec Construction position performs unexpectedly, Viettel Construction 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 Viettel Construction will offset losses from the drop in Viettel Construction's long position.| Cotec Construction vs. FIT INVEST JSC | Cotec Construction vs. Damsan JSC | Cotec Construction vs. An Phat Plastic | Cotec Construction vs. Alphanam ME |
| Viettel Construction vs. FIT INVEST JSC | Viettel Construction vs. Damsan JSC | Viettel Construction vs. An Phat Plastic | Viettel Construction vs. Alphanam ME |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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