Correlation Between VietinBank Securities and Hochiminh City

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

By analyzing existing cross correlation between VietinBank Securities JSC and Hochiminh City Metal, you can compare the effects of market volatilities on VietinBank Securities and Hochiminh City 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 VietinBank Securities with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of VietinBank Securities and Hochiminh City.

Diversification Opportunities for VietinBank Securities and Hochiminh City

-0.23

Correlation Coefficient

VietinBank Securities  Hochiminh City

Very good diversification

The 3 months correlation between VietinBank and Hochiminh is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and VietinBank Securities 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 VietinBank Securities JSC are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of VietinBank Securities i.e., VietinBank Securities and Hochiminh City go up and down completely randomly.

Pair Corralation between VietinBank Securities and Hochiminh City

Assuming the 90 days trading horizon VietinBank Securities JSC is expected to under-perform the Hochiminh City. But the stock apears to be less risky and, when comparing its historical volatility, VietinBank Securities JSC is 3.18 times less risky than Hochiminh City. The stock trades about -0.44 of its potential returns per unit of risk. The Hochiminh City Metal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,160,000  in Hochiminh City Metal on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Hochiminh City Metal or generate 0.0% return on investment over 90 days.

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

VietinBank Securities JSC  vs.  Hochiminh City Metal

VietinBank Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VietinBank Securities 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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hochiminh City Metal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hochiminh City Metal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Hochiminh City may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with VietinBank Securities and Hochiminh City

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

The idea behind VietinBank Securities JSC and Hochiminh City Metal 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.