Correlation Between Viettel Construction and Innovative Technology

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

Diversification Opportunities for Viettel Construction and Innovative Technology

-0.12

Correlation Coefficient

Viettel Construction  Innovative Technology

Good diversification

The 3 months correlation between Viettel and Innovative is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Innovative Technology Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Technology 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 Innovative Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Technology has no effect on the direction of Viettel Construction i.e., Viettel Construction and Innovative Technology go up and down completely randomly.

Pair Corralation between Viettel Construction and Innovative Technology

Assuming the 90 days trading horizon Viettel Construction JSC is expected to under-perform the Innovative Technology. But the stock apears to be less risky and, when comparing its historical volatility, Viettel Construction JSC is 1.25 times less risky than Innovative Technology. The stock trades about -0.16 of its potential returns per unit of risk. The Innovative Technology Development is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,350,000  in Innovative Technology Development on December 24, 2024 and sell it today you would earn a total of  60,000  from holding Innovative Technology Development or generate 4.44% return on investment over 90 days.

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

Viettel Construction JSC  vs.  Innovative Technology Developm

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.

Innovative Technology

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Viettel Construction and Innovative Technology

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

The idea behind Viettel Construction JSC and Innovative Technology Development 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.