Correlation Between Vietnam Rubber and Telecoms Informatics
Can any of the company-specific risk be diversified away by investing in both Vietnam Rubber 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 Vietnam Rubber and Telecoms Informatics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Rubber Group and Telecoms Informatics JSC, you can compare the effects of market volatilities on Vietnam Rubber 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 Vietnam Rubber with a short position of Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Rubber and Telecoms Informatics.
Diversification Opportunities for Vietnam Rubber and Telecoms Informatics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Telecoms is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Rubber Group 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 Vietnam Rubber 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 Rubber Group 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 Vietnam Rubber i.e., Vietnam Rubber and Telecoms Informatics go up and down completely randomly.
Pair Corralation between Vietnam Rubber and Telecoms Informatics
Assuming the 90 days trading horizon Vietnam Rubber Group is expected to under-perform the Telecoms Informatics. But the stock apears to be less risky and, when comparing its historical volatility, Vietnam Rubber Group is 1.11 times less risky than Telecoms Informatics. The stock trades about -0.06 of its potential returns per unit of risk. The Telecoms Informatics JSC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,301,863 in Telecoms Informatics JSC on October 26, 2024 and sell it today you would earn a total of 173,137 from holding Telecoms Informatics JSC or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vietnam Rubber Group vs. Telecoms Informatics JSC
Performance |
| Timeline |
| Vietnam Rubber Group |
| Telecoms Informatics JSC |
Vietnam Rubber and Telecoms Informatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Rubber and Telecoms Informatics
The main advantage of trading using opposite Vietnam Rubber and Telecoms Informatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Rubber 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.| Vietnam Rubber vs. FIT INVEST JSC | Vietnam Rubber vs. Damsan JSC | Vietnam Rubber vs. An Phat Plastic | Vietnam Rubber vs. APG Securities Joint |
| Telecoms Informatics vs. Pha Le Plastics | Telecoms Informatics vs. Vietnam Rubber Group | Telecoms Informatics vs. DIC Holdings Construction | Telecoms Informatics vs. Investment And Construction |
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 Stocks Directory module to find actively traded stocks across global markets.
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