Correlation Between Techno Agricultural and Vietnam Airlines
Can any of the company-specific risk be diversified away by investing in both Techno Agricultural and Vietnam Airlines 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 Techno Agricultural and Vietnam Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techno Agricultural Supplying and Vietnam Airlines JSC, you can compare the effects of market volatilities on Techno Agricultural and Vietnam Airlines 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 Techno Agricultural with a short position of Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and Vietnam Airlines.
Diversification Opportunities for Techno Agricultural and Vietnam Airlines
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Techno and Vietnam is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines JSC and Techno Agricultural 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 Techno Agricultural Supplying are associated (or correlated) with Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and Vietnam Airlines go up and down completely randomly.
Pair Corralation between Techno Agricultural and Vietnam Airlines
Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the Vietnam Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Techno Agricultural Supplying is 2.24 times less risky than Vietnam Airlines. The stock trades about -0.31 of its potential returns per unit of risk. The Vietnam Airlines JSC is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,050,000 in Vietnam Airlines JSC on September 3, 2024 and sell it today you would earn a total of 740,000 from holding Vietnam Airlines JSC or generate 36.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techno Agricultural Supplying vs. Vietnam Airlines JSC
Performance |
| Timeline |
| Techno Agricultural |
| Vietnam Airlines JSC |
Techno Agricultural and Vietnam Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techno Agricultural and Vietnam Airlines
The main advantage of trading using opposite Techno Agricultural and Vietnam Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techno Agricultural position performs unexpectedly, Vietnam Airlines 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 Vietnam Airlines will offset losses from the drop in Vietnam Airlines' long position.| Techno Agricultural vs. FIT INVEST JSC | Techno Agricultural vs. Damsan JSC | Techno Agricultural vs. An Phat Plastic | Techno Agricultural vs. Alphanam ME |
| Vietnam Airlines vs. MST Investment JSC | Vietnam Airlines vs. Petrolimex Information Technology | Vietnam Airlines vs. PV2 Investment JSC | Vietnam Airlines vs. Vincom Retail JSC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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