Correlation Between VTC Telecommunicatio and Bao Ngoc
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Bao Ngoc 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 VTC Telecommunicatio and Bao Ngoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VTC Telecommunications JSC and Bao Ngoc Investment, you can compare the effects of market volatilities on VTC Telecommunicatio and Bao Ngoc 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 VTC Telecommunicatio with a short position of Bao Ngoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Bao Ngoc.
Diversification Opportunities for VTC Telecommunicatio and Bao Ngoc
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VTC and Bao is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Bao Ngoc Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bao Ngoc Investment and VTC Telecommunicatio 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 VTC Telecommunications JSC are associated (or correlated) with Bao Ngoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bao Ngoc Investment has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Bao Ngoc go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Bao Ngoc
Assuming the 90 days trading horizon VTC Telecommunications JSC is expected to generate 1.32 times more return on investment than Bao Ngoc. However, VTC Telecommunicatio is 1.32 times more volatile than Bao Ngoc Investment. It trades about 0.3 of its potential returns per unit of risk. Bao Ngoc Investment is currently generating about -0.45 per unit of risk. If you would invest 830,000 in VTC Telecommunications JSC on October 28, 2024 and sell it today you would earn a total of 120,000 from holding VTC Telecommunications JSC or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Bao Ngoc Investment
Performance |
| Timeline |
| VTC Telecommunications |
| Bao Ngoc Investment |
VTC Telecommunicatio and Bao Ngoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Bao Ngoc
The main advantage of trading using opposite VTC Telecommunicatio and Bao Ngoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Bao Ngoc 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 Bao Ngoc will offset losses from the drop in Bao Ngoc's long position.| VTC Telecommunicatio vs. Ba Ria Thermal | VTC Telecommunicatio vs. CEO Group JSC | VTC Telecommunicatio vs. Pha Le Plastics | VTC Telecommunicatio vs. Tay Ninh Rubber |
| Bao Ngoc vs. FIT INVEST JSC | Bao Ngoc vs. Damsan JSC | Bao Ngoc vs. An Phat Plastic | Bao Ngoc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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