Correlation Between Viettel Construction and Construction JSC
Can any of the company-specific risk be diversified away by investing in both Viettel Construction and Construction JSC 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 Construction JSC 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 Construction JSC No5, you can compare the effects of market volatilities on Viettel Construction and Construction JSC 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 Construction JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viettel Construction and Construction JSC.
Diversification Opportunities for Viettel Construction and Construction JSC
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viettel and Construction is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Construction JSC No5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction JSC No5 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 Construction JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction JSC No5 has no effect on the direction of Viettel Construction i.e., Viettel Construction and Construction JSC go up and down completely randomly.
Pair Corralation between Viettel Construction and Construction JSC
Assuming the 90 days trading horizon Viettel Construction is expected to generate 1.14 times less return on investment than Construction JSC. But when comparing it to its historical volatility, Viettel Construction JSC is 1.53 times less risky than Construction JSC. It trades about 0.07 of its potential returns per unit of risk. Construction JSC No5 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,866,667 in Construction JSC No5 on September 2, 2024 and sell it today you would earn a total of 338,333 from holding Construction JSC No5 or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.76% |
| Values | Daily Returns |
Viettel Construction JSC vs. Construction JSC No5
Performance |
| Timeline |
| Viettel Construction JSC |
| Construction JSC No5 |
Viettel Construction and Construction JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viettel Construction and Construction JSC
The main advantage of trading using opposite Viettel Construction and Construction JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viettel Construction position performs unexpectedly, Construction JSC 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 Construction JSC will offset losses from the drop in Construction JSC's long position.| Viettel Construction vs. FIT INVEST JSC | Viettel Construction vs. Damsan JSC | Viettel Construction vs. An Phat Plastic | Viettel Construction vs. Alphanam ME |
| Construction JSC vs. FIT INVEST JSC | Construction JSC vs. Damsan JSC | Construction JSC vs. An Phat Plastic | Construction JSC 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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