Correlation Between VTC Telecommunicatio and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Hochiminh City 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 Hochiminh City 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 Hochiminh City Metal, you can compare the effects of market volatilities on VTC Telecommunicatio and Hochiminh City 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 Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Hochiminh City.
Diversification Opportunities for VTC Telecommunicatio and Hochiminh City
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between VTC and Hochiminh is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal 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 Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Hochiminh City go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Hochiminh City
Assuming the 90 days trading horizon VTC Telecommunications JSC is expected to generate 1.0 times more return on investment than Hochiminh City. However, VTC Telecommunicatio is 1.0 times more volatile than Hochiminh City Metal. It trades about 0.36 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.31 per unit of risk. If you would invest 800,000 in VTC Telecommunications JSC on November 3, 2024 and sell it today you would earn a total of 130,000 from holding VTC Telecommunications JSC or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.33% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Hochiminh City Metal
Performance |
| Timeline |
| VTC Telecommunications |
| Hochiminh City Metal |
VTC Telecommunicatio and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Hochiminh City
The main advantage of trading using opposite VTC Telecommunicatio and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.| VTC Telecommunicatio vs. Saigon Beer Alcohol | VTC Telecommunicatio vs. Mobile World Investment | VTC Telecommunicatio vs. FPT Digital Retail | VTC Telecommunicatio vs. Elcom Technology Communications |
| Hochiminh City vs. Saigon Viendong Technology | Hochiminh City vs. FPT Digital Retail | Hochiminh City vs. Vietnam Technological And | Hochiminh City vs. Asia Commercial Bank |
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 CEOs Directory module to screen CEOs from public companies around the world.
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