Correlation Between Atesco Industrial and Vietnam Maritime

Can any of the company-specific risk be diversified away by investing in both Atesco Industrial and Vietnam Maritime 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 Atesco Industrial and Vietnam Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atesco Industrial Cartering and Vietnam Maritime Development, you can compare the effects of market volatilities on Atesco Industrial and Vietnam Maritime 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 Atesco Industrial with a short position of Vietnam Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atesco Industrial and Vietnam Maritime.

Diversification Opportunities for Atesco Industrial and Vietnam Maritime

-0.1

Correlation Coefficient

Atesco Industrial  Vietnam Maritime

Good diversification

The 3 months correlation between Atesco and Vietnam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Atesco Industrial Cartering and Vietnam Maritime Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Maritime Dev and Atesco Industrial 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 Atesco Industrial Cartering are associated (or correlated) with Vietnam Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Maritime Dev has no effect on the direction of Atesco Industrial i.e., Atesco Industrial and Vietnam Maritime go up and down completely randomly.

Pair Corralation between Atesco Industrial and Vietnam Maritime

Assuming the 90 days trading horizon Atesco Industrial is expected to generate 1.81 times less return on investment than Vietnam Maritime. But when comparing it to its historical volatility, Atesco Industrial Cartering is 1.17 times less risky than Vietnam Maritime. It trades about 0.07 of its potential returns per unit of risk. Vietnam Maritime Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,390,000  in Vietnam Maritime Development on December 27, 2024 and sell it today you would earn a total of  400,000  from holding Vietnam Maritime Development or generate 16.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.17%
Values	Daily Returns

Atesco Industrial Cartering  vs.  Vietnam Maritime Development

Atesco Industrial

Risk-Adjusted Performance

Modest

Over the last 90 days Atesco Industrial Cartering has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Atesco Industrial displayed solid returns over the last few months and may actually be approaching a breakup point.

Vietnam Maritime Dev

Risk-Adjusted Performance

OK

Over the last 90 days Vietnam Maritime Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Vietnam Maritime displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atesco Industrial and Vietnam Maritime

The main advantage of trading using opposite Atesco Industrial and Vietnam Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atesco Industrial position performs unexpectedly, Vietnam Maritime 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 Maritime will offset losses from the drop in Vietnam Maritime's long position.

The idea behind Atesco Industrial Cartering and Vietnam Maritime Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.