Correlation Between Ba Ria and Vietnam Technological

Can any of the company-specific risk be diversified away by investing in both Ba Ria and Vietnam Technological 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 Vietnam Technological 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 Vietnam Technological And, you can compare the effects of market volatilities on Ba Ria and Vietnam Technological 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 Vietnam Technological. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and Vietnam Technological.

Diversification Opportunities for Ba Ria and Vietnam Technological

0.76

Correlation Coefficient

Ba Ria  Vietnam Technological

Poor diversification

The 3 months correlation between BTP and Vietnam is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And 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 Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Ba Ria i.e., Ba Ria and Vietnam Technological go up and down completely randomly.

Pair Corralation between Ba Ria and Vietnam Technological

Assuming the 90 days trading horizon Ba Ria is expected to generate 7.46 times less return on investment than Vietnam Technological. But when comparing it to its historical volatility, Ba Ria Thermal is 1.85 times less risky than Vietnam Technological. It trades about 0.04 of its potential returns per unit of risk. Vietnam Technological And is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,440,000  in Vietnam Technological And on December 28, 2024 and sell it today you would earn a total of  335,000  from holding Vietnam Technological And or generate 13.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ba Ria Thermal  vs.  Vietnam Technological And

Ba Ria Thermal

Risk-Adjusted Performance

Insignificant

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

Vietnam Technological And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vietnam Technological And are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Vietnam Technological displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ba Ria and Vietnam Technological

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

The idea behind Ba Ria Thermal and Vietnam Technological And 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.