Correlation Between Ba Ria and Viettel Construction

Can any of the company-specific risk be diversified away by investing in both Ba Ria 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 Ba Ria and Viettel Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ba Ria Thermal and Viettel Construction JSC, you can compare the effects of market volatilities on Ba Ria 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 Ba Ria with a short position of Viettel Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Viettel Construction.

Diversification Opportunities for Ba Ria and Viettel Construction

0.72

Correlation Coefficient

Ba Ria  Viettel Construction

Poor diversification

The 3 months correlation between BTP and Viettel is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal 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 Ba Ria 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 Ba Ria Thermal 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 Ba Ria i.e., Ba Ria and Viettel Construction go up and down completely randomly.

Pair Corralation between Ba Ria and Viettel Construction

Assuming the 90 days trading horizon Ba Ria Thermal is expected to under-perform the Viettel Construction. But the stock apears to be less risky and, when comparing its historical volatility, Ba Ria Thermal is 1.44 times less risky than Viettel Construction. The stock trades about 0.0 of its potential returns per unit of risk. The Viettel Construction JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,739,781  in Viettel Construction JSC on October 3, 2024 and sell it today you would earn a total of  5,710,219  from holding Viettel Construction JSC or generate 84.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.24%
Values	Daily Returns

Ba Ria Thermal  vs.  Viettel Construction JSC

Ba Ria Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ba Ria Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Viettel Construction JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viettel Construction JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Viettel Construction is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ba Ria and Viettel Construction

The main advantage of trading using opposite Ba Ria and Viettel Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ba Ria 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 Ba Ria Thermal 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.