Correlation Between Investment and Viettel Construction

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Can any of the company-specific risk be diversified away by investing in both Investment and Viettel Construction 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 Investment and Viettel Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment and Industrial and Viettel Construction JSC, you can compare the effects of market volatilities on Investment and Viettel Construction 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 Investment with a short position of Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Viettel Construction.

Diversification Opportunities for Investment and Viettel Construction

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Investment and Viettel is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and Viettel Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viettel Construction JSC and Investment 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 Investment and Industrial are associated (or correlated) with Viettel Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viettel Construction JSC has no effect on the direction of Investment i.e., Investment and Viettel Construction go up and down completely randomly.

Pair Corralation between Investment and Viettel Construction

Assuming the 90 days trading horizon Investment and Industrial is expected to under-perform the Viettel Construction. But the stock apears to be less risky and, when comparing its historical volatility, Investment and Industrial is 1.39 times less risky than Viettel Construction. The stock trades about -0.02 of its potential returns per unit of risk. The Viettel Construction JSC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5,841,774  in Viettel Construction JSC on October 25, 2024 and sell it today you would earn a total of  7,538,226  from holding Viettel Construction JSC or generate 129.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Investment and Industrial  vs.  Viettel Construction JSC

 Performance 
       Timeline  
Investment and Industrial 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Investment and Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Viettel Construction JSC 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Viettel Construction JSC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Viettel Construction may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Investment and Viettel Construction Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Investment and Viettel Construction

The main advantage of trading using opposite Investment and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Viettel Construction 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 Viettel Construction will offset losses from the drop in Viettel Construction's long position.
The idea behind Investment and Industrial and Viettel Construction JSC 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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