Correlation Between Viettel Construction and Investment

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

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

Diversification Opportunities for Viettel Construction and Investment

-0.79

Correlation Coefficient

Viettel Construction  Investment

Pay attention - limited upside

The 3 months correlation between Viettel and Investment is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial and Viettel Construction 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 Viettel Construction JSC are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of Viettel Construction i.e., Viettel Construction and Investment go up and down completely randomly.

Pair Corralation between Viettel Construction and Investment

Assuming the 90 days trading horizon Viettel Construction JSC is expected to under-perform the Investment. In addition to that, Viettel Construction is 1.04 times more volatile than Investment and Industrial. It trades about -0.16 of its total potential returns per unit of risk. Investment and Industrial is currently generating about 0.17 per unit of volatility. If you would invest  6,790,000  in Investment and Industrial on December 24, 2024 and sell it today you would earn a total of  1,080,000  from holding Investment and Industrial or generate 15.91% return on investment over 90 days.

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

Viettel Construction JSC  vs.  Investment and Industrial

Viettel Construction JSC

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Investment and Industrial

Risk-Adjusted Performance

Good

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

Pair Trading with Viettel Construction and Investment

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

The idea behind Viettel Construction JSC and Investment and Industrial 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.