Correlation Between VTC Telecommunicatio and Song Hong
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Song Hong 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 Song Hong 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 Song Hong Garment, you can compare the effects of market volatilities on VTC Telecommunicatio and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Song Hong.
Diversification Opportunities for VTC Telecommunicatio and Song Hong
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between VTC and Song is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Song Hong Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Garment 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Garment has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Song Hong go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Song Hong
Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 2.2 times less return on investment than Song Hong. In addition to that, VTC Telecommunicatio is 2.41 times more volatile than Song Hong Garment. It trades about 0.02 of its total potential returns per unit of risk. Song Hong Garment is currently generating about 0.09 per unit of volatility. If you would invest 3,519,620 in Song Hong Garment on September 2, 2024 and sell it today you would earn a total of 1,400,380 from holding Song Hong Garment or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.24% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Song Hong Garment
Performance |
| Timeline |
| VTC Telecommunications |
| Song Hong Garment |
VTC Telecommunicatio and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Song Hong
The main advantage of trading using opposite VTC Telecommunicatio and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| VTC Telecommunicatio vs. Song Hong Garment | VTC Telecommunicatio vs. Alphanam ME | VTC Telecommunicatio vs. Hochiminh City Metal | VTC Telecommunicatio vs. Atesco Industrial Cartering |
| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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