Correlation Between VTC Telecommunicatio and Saigon Beer
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Saigon Beer 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 Saigon Beer 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 Saigon Beer Alcohol, you can compare the effects of market volatilities on VTC Telecommunicatio and Saigon Beer 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 Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Saigon Beer.
Diversification Opportunities for VTC Telecommunicatio and Saigon Beer
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between VTC and Saigon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Saigon Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Beer Alcohol 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 Saigon Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Beer Alcohol has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Saigon Beer go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Saigon Beer
Assuming the 90 days trading horizon VTC Telecommunications JSC is expected to generate 2.91 times more return on investment than Saigon Beer. However, VTC Telecommunicatio is 2.91 times more volatile than Saigon Beer Alcohol. It trades about 0.28 of its potential returns per unit of risk. Saigon Beer Alcohol is currently generating about -0.21 per unit of risk. If you would invest 820,000 in VTC Telecommunications JSC on October 30, 2024 and sell it today you would earn a total of 110,000 from holding VTC Telecommunications JSC or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Saigon Beer Alcohol
Performance |
| Timeline |
| VTC Telecommunications |
| Saigon Beer Alcohol |
VTC Telecommunicatio and Saigon Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Saigon Beer
The main advantage of trading using opposite VTC Telecommunicatio and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Saigon Beer 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 Saigon Beer will offset losses from the drop in Saigon Beer's long position.| VTC Telecommunicatio vs. Ba Ria Thermal | VTC Telecommunicatio vs. CEO Group JSC | VTC Telecommunicatio vs. Pha Le Plastics | VTC Telecommunicatio vs. Tay Ninh Rubber |
| Saigon Beer vs. Vu Dang Investment | Saigon Beer vs. Din Capital Investment | Saigon Beer vs. Hai An Transport | Saigon Beer vs. Tien Giang Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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