Correlation Between VTC Telecommunicatio and Hung Hau
Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Hung Hau 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 Hung Hau 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 Hung Hau Agricultural, you can compare the effects of market volatilities on VTC Telecommunicatio and Hung Hau 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 Hung Hau. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Hung Hau.
Diversification Opportunities for VTC Telecommunicatio and Hung Hau
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VTC and Hung is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Hung Hau Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Hau Agricultural 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 Hung Hau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Hau Agricultural has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Hung Hau go up and down completely randomly.
Pair Corralation between VTC Telecommunicatio and Hung Hau
Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 4.39 times less return on investment than Hung Hau. In addition to that, VTC Telecommunicatio is 1.22 times more volatile than Hung Hau Agricultural. It trades about 0.07 of its total potential returns per unit of risk. Hung Hau Agricultural is currently generating about 0.39 per unit of volatility. If you would invest 980,000 in Hung Hau Agricultural on August 30, 2024 and sell it today you would earn a total of 120,000 from holding Hung Hau Agricultural or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
VTC Telecommunications JSC vs. Hung Hau Agricultural
Performance |
| Timeline |
| VTC Telecommunications |
| Hung Hau Agricultural |
VTC Telecommunicatio and Hung Hau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTC Telecommunicatio and Hung Hau
The main advantage of trading using opposite VTC Telecommunicatio and Hung Hau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio position performs unexpectedly, Hung Hau 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 Hung Hau will offset losses from the drop in Hung Hau's long position.| VTC Telecommunicatio vs. PetroVietnam Transportation Corp | VTC Telecommunicatio vs. Travel Investment and | VTC Telecommunicatio vs. Nam Long Investment | VTC Telecommunicatio vs. Ba Ria Thermal |
| Hung Hau vs. PetroVietnam Transportation Corp | Hung Hau vs. Travel Investment and | Hung Hau vs. Nam Long Investment | Hung Hau vs. Ba Ria Thermal |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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