Correlation Between VTC Telecommunicatio and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Vietnam Rubber 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 Vietnam Rubber 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 Vietnam Rubber Group, you can compare the effects of market volatilities on VTC Telecommunicatio and Vietnam Rubber 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 Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Vietnam Rubber.
Diversification Opportunities for VTC Telecommunicatio and Vietnam Rubber
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VTC and Vietnam is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group 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 Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Vietnam Rubber go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Vietnam Rubber
Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 2.91 times less return on investment than Vietnam Rubber. In addition to that, VTC Telecommunicatio is 1.92 times more volatile than Vietnam Rubber Group. It trades about 0.01 of its total potential returns per unit of risk. Vietnam Rubber Group is currently generating about 0.07 per unit of volatility. If you would invest 1,508,150 in Vietnam Rubber Group on September 4, 2024 and sell it today you would earn a total of 1,636,850 from holding Vietnam Rubber Group or generate 108.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.12% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Vietnam Rubber Group
Performance |
| Timeline |
| VTC Telecommunications |
| Vietnam Rubber Group |
VTC Telecommunicatio and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Vietnam Rubber
The main advantage of trading using opposite VTC Telecommunicatio and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Vietnam Rubber 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 Rubber will offset losses from the drop in Vietnam Rubber'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 |
| Vietnam Rubber vs. Hanoi Plastics JSC | Vietnam Rubber vs. Danang Education Investment | Vietnam Rubber vs. VTC Telecommunications JSC | Vietnam Rubber vs. Vietnam Technological And |
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 Stocks Directory module to find actively traded stocks across global markets.
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