Correlation Between Telecoms Informatics and Saigon Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Telecoms Informatics and Saigon Telecommunicatio 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 Telecoms Informatics and Saigon Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecoms Informatics JSC and Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Telecoms Informatics and Saigon Telecommunicatio 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 Telecoms Informatics with a short position of Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecoms Informatics and Saigon Telecommunicatio.
Diversification Opportunities for Telecoms Informatics and Saigon Telecommunicatio
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telecoms and Saigon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Telecoms Informatics 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 Telecoms Informatics JSC are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and Saigon Telecommunicatio go up and down completely randomly.
Pair Corralation between Telecoms Informatics and Saigon Telecommunicatio
Assuming the 90 days trading horizon Telecoms Informatics JSC is expected to generate 1.65 times more return on investment than Saigon Telecommunicatio. However, Telecoms Informatics is 1.65 times more volatile than Saigon Telecommunication Technologies. It trades about 0.05 of its potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about -0.02 per unit of risk. If you would invest 1,250,000 in Telecoms Informatics JSC on August 29, 2024 and sell it today you would earn a total of 30,000 from holding Telecoms Informatics JSC or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecoms Informatics JSC vs. Saigon Telecommunication Techn
Performance |
| Timeline |
| Telecoms Informatics JSC |
| Saigon Telecommunicatio |
Telecoms Informatics and Saigon Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecoms Informatics and Saigon Telecommunicatio
The main advantage of trading using opposite Telecoms Informatics and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecoms Informatics position performs unexpectedly, Saigon Telecommunicatio 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 Saigon Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio's long position.The idea behind Telecoms Informatics JSC and Saigon Telecommunication Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Saigon Telecommunicatio vs. FIT INVEST JSC | Saigon Telecommunicatio vs. Damsan JSC | Saigon Telecommunicatio vs. An Phat Plastic | Saigon Telecommunicatio vs. APG Securities Joint |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |