Correlation Between VTC Telecommunicatio and Viettel Construction
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Viettel Construction 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 Viettel Construction 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 Viettel Construction JSC, you can compare the effects of market volatilities on VTC Telecommunicatio and Viettel Construction 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 Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Viettel Construction.
Diversification Opportunities for VTC Telecommunicatio and Viettel Construction
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VTC and Viettel is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel Construction JSC 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 Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Viettel Construction go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Viettel Construction
Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 2.09 times less return on investment than Viettel Construction. In addition to that, VTC Telecommunicatio is 1.72 times more volatile than Viettel Construction JSC. It trades about 0.02 of its total potential returns per unit of risk. Viettel Construction JSC is currently generating about 0.07 per unit of volatility. If you would invest 8,587,918 in Viettel Construction JSC on September 4, 2024 and sell it today you would earn a total of 3,292,082 from holding Viettel Construction JSC or generate 38.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.2% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Viettel Construction JSC
Performance |
| Timeline |
| VTC Telecommunications |
| Viettel Construction JSC |
VTC Telecommunicatio and Viettel Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Viettel Construction
The main advantage of trading using opposite VTC Telecommunicatio and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Viettel Construction 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 Viettel Construction will offset losses from the drop in Viettel Construction's long position.| VTC Telecommunicatio vs. Alphanam ME | VTC Telecommunicatio vs. Hochiminh City Metal | VTC Telecommunicatio vs. Atesco Industrial Cartering | VTC Telecommunicatio vs. Danang Education Investment |
| Viettel Construction vs. Tng Investment And | Viettel Construction vs. Everland Investment JSC | Viettel Construction vs. Innovative Technology Development | Viettel Construction vs. LDG Investment 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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