Correlation Between IDJ FINANCIAL and VTC Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL and VTC 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 IDJ FINANCIAL and VTC Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and VTC Telecommunications JSC, you can compare the effects of market volatilities on IDJ FINANCIAL and VTC 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 IDJ FINANCIAL with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and VTC Telecommunicatio.
Diversification Opportunities for IDJ FINANCIAL and VTC Telecommunicatio
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IDJ and VTC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with VTC Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC Telecommunications has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and VTC Telecommunicatio go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and VTC Telecommunicatio
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the VTC Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, IDJ FINANCIAL is 1.94 times less risky than VTC Telecommunicatio. The stock trades about -0.08 of its potential returns per unit of risk. The VTC Telecommunications JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 820,000 in VTC Telecommunications JSC on August 31, 2024 and sell it today you would earn a total of 20,000 from holding VTC Telecommunications JSC or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
IDJ FINANCIAL vs. VTC Telecommunications JSC
Performance |
| Timeline |
| IDJ FINANCIAL |
| VTC Telecommunications |
IDJ FINANCIAL and VTC Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and VTC Telecommunicatio
The main advantage of trading using opposite IDJ FINANCIAL and VTC Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL position performs unexpectedly, VTC 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 VTC Telecommunicatio will offset losses from the drop in VTC Telecommunicatio's long position.| IDJ FINANCIAL vs. DIC Holdings Construction | IDJ FINANCIAL vs. Development Investment Construction | IDJ FINANCIAL vs. Tin Nghia Industrial | IDJ FINANCIAL vs. Techno Agricultural Supplying |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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