Correlation Between Tien Giang and VTC Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Tien Giang 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 Tien Giang and VTC Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and VTC Telecommunications JSC, you can compare the effects of market volatilities on Tien Giang 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 Tien Giang with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and VTC Telecommunicatio.
Diversification Opportunities for Tien Giang and VTC Telecommunicatio
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tien and VTC is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and Tien Giang 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 Tien Giang Investment 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 Tien Giang i.e., Tien Giang and VTC Telecommunicatio go up and down completely randomly.
Pair Corralation between Tien Giang and VTC Telecommunicatio
Assuming the 90 days trading horizon Tien Giang Investment is expected to under-perform the VTC Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Tien Giang Investment is 3.62 times less risky than VTC Telecommunicatio. The stock trades about -0.06 of its potential returns per unit of risk. The VTC Telecommunications JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 810,000 in VTC Telecommunications JSC on August 27, 2024 and sell it today you would earn a total of 30,000 from holding VTC Telecommunications JSC or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Tien Giang Investment vs. VTC Telecommunications JSC
Performance |
| Timeline |
| Tien Giang Investment |
| VTC Telecommunications |
Tien Giang and VTC Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Giang and VTC Telecommunicatio
The main advantage of trading using opposite Tien Giang and VTC Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang 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.| Tien Giang vs. Danang Rubber JSC | Tien Giang vs. Phuoc Hoa Rubber | Tien Giang vs. Southern Rubber Industry | Tien Giang vs. Tay Ninh Rubber |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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