Correlation Between Viettel Construction and Vincom Retail

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

Diversification Opportunities for Viettel Construction and Vincom Retail

0.41

Correlation Coefficient

Viettel Construction  Vincom Retail

Very weak diversification

The 3 months correlation between Viettel and Vincom is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Viettel Construction i.e., Viettel Construction and Vincom Retail go up and down completely randomly.

Pair Corralation between Viettel Construction and Vincom Retail

Assuming the 90 days trading horizon Viettel Construction JSC is expected to generate 1.85 times more return on investment than Vincom Retail. However, Viettel Construction is 1.85 times more volatile than Vincom Retail JSC. It trades about 0.0 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.14 per unit of risk. If you would invest  12,201,900  in Viettel Construction JSC on September 17, 2024 and sell it today you would lose (151,900) from holding Viettel Construction JSC or give up 1.24% of portfolio value over 90 days.

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

Viettel Construction JSC  vs.  Vincom Retail JSC

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.

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Viettel Construction and Vincom Retail

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

The idea behind Viettel Construction JSC and Vincom Retail 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.