Correlation Between VTC Telecommunicatio and Sao Ta
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Sao Ta 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 Sao Ta 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 Sao Ta Foods, you can compare the effects of market volatilities on VTC Telecommunicatio and Sao Ta 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 Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Sao Ta.
Diversification Opportunities for VTC Telecommunicatio and Sao Ta
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VTC and Sao is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods 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 Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Sao Ta go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Sao Ta
Assuming the 90 days trading horizon VTC Telecommunications JSC is expected to generate 3.75 times more return on investment than Sao Ta. However, VTC Telecommunicatio is 3.75 times more volatile than Sao Ta Foods. It trades about 0.06 of its potential returns per unit of risk. Sao Ta Foods is currently generating about 0.13 per unit of risk. If you would invest 810,000 in VTC Telecommunications JSC on August 29, 2024 and sell it today you would earn a total of 20,000 from holding VTC Telecommunications JSC or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Sao Ta Foods
Performance |
| Timeline |
| VTC Telecommunications |
| Sao Ta Foods |
VTC Telecommunicatio and Sao Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Sao Ta
The main advantage of trading using opposite VTC Telecommunicatio and Sao Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Sao Ta 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 Sao Ta will offset losses from the drop in Sao Ta's long position.| VTC Telecommunicatio vs. Idico JSC | VTC Telecommunicatio vs. Alphanam ME | VTC Telecommunicatio vs. Hochiminh City Metal | VTC Telecommunicatio vs. Atesco Industrial Cartering |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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