Correlation Between Viettel Construction and DIC Holdings

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

Diversification Opportunities for Viettel Construction and DIC Holdings

-0.56

Correlation Coefficient

Viettel Construction  DIC Holdings

Excellent diversification

The 3 months correlation between Viettel and DIC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and DIC Holdings Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIC Holdings Construction 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 DIC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIC Holdings Construction has no effect on the direction of Viettel Construction i.e., Viettel Construction and DIC Holdings go up and down completely randomly.

Pair Corralation between Viettel Construction and DIC Holdings

Assuming the 90 days trading horizon Viettel Construction JSC is expected to under-perform the DIC Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Viettel Construction JSC is 1.69 times less risky than DIC Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The DIC Holdings Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  970,165  in DIC Holdings Construction on October 20, 2024 and sell it today you would earn a total of  129,835  from holding DIC Holdings Construction or generate 13.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Viettel Construction JSC  vs.  DIC Holdings Construction

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.

DIC Holdings Construction

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DIC Holdings Construction are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIC Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viettel Construction and DIC Holdings

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

The idea behind Viettel Construction JSC and DIC Holdings Construction 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.