Correlation Between Viettel Construction and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Viettel Construction and Vietnam Rubber 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 Viettel Construction and Vietnam Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viettel Construction JSC and Vietnam Rubber Group, you can compare the effects of market volatilities on Viettel Construction and Vietnam Rubber 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 Viettel Construction with a short position of Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viettel Construction and Vietnam Rubber.
Diversification Opportunities for Viettel Construction and Vietnam Rubber
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viettel and Vietnam is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group and Viettel 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 Viettel Construction JSC are associated (or correlated) with Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Viettel Construction i.e., Viettel Construction and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Viettel Construction and Vietnam Rubber
Assuming the 90 days trading horizon Viettel Construction JSC is expected to under-perform the Vietnam Rubber. In addition to that, Viettel Construction is 1.75 times more volatile than Vietnam Rubber Group. It trades about -0.09 of its total potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.13 per unit of volatility. If you would invest 3,290,000 in Vietnam Rubber Group on September 13, 2024 and sell it today you would lose (145,000) from holding Vietnam Rubber Group or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viettel Construction JSC vs. Vietnam Rubber Group
Performance |
| Timeline |
| Viettel Construction JSC |
| Vietnam Rubber Group |
Viettel Construction and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viettel Construction and Vietnam Rubber
The main advantage of trading using opposite Viettel Construction and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viettel Construction position performs unexpectedly, Vietnam Rubber 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 Rubber will offset losses from the drop in Vietnam Rubber's long position.| Viettel Construction vs. Transimex Transportation JSC | Viettel Construction vs. Fecon Mining JSC | Viettel Construction vs. Ducgiang Chemicals Detergent | Viettel Construction vs. Phuoc Hoa Rubber |
| Vietnam Rubber vs. Elcom Technology Communications | Vietnam Rubber vs. Saigon Viendong Technology | Vietnam Rubber vs. Tien Giang Investment | Vietnam Rubber vs. FPT Digital Retail |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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