Correlation Between VietinBank Securities and Telecoms Informatics

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

Diversification Opportunities for VietinBank Securities and Telecoms Informatics

-0.76

Correlation Coefficient

VietinBank Securities  Telecoms Informatics

Pay attention - limited upside

The 3 months correlation between VietinBank and Telecoms is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC 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 Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of VietinBank Securities i.e., VietinBank Securities and Telecoms Informatics go up and down completely randomly.

Pair Corralation between VietinBank Securities and Telecoms Informatics

Assuming the 90 days trading horizon VietinBank Securities JSC is expected to under-perform the Telecoms Informatics. But the stock apears to be less risky and, when comparing its historical volatility, VietinBank Securities JSC is 1.2 times less risky than Telecoms Informatics. The stock trades about -0.03 of its potential returns per unit of risk. The Telecoms Informatics JSC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,210,000  in Telecoms Informatics JSC on September 12, 2024 and sell it today you would earn a total of  90,000  from holding Telecoms Informatics JSC or generate 7.44% return on investment over 90 days.

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

VietinBank Securities JSC  vs.  Telecoms Informatics JSC

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 very healthy basic indicators, VietinBank Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Telecoms Informatics JSC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telecoms Informatics JSC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Telecoms Informatics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VietinBank Securities and Telecoms Informatics

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

The idea behind VietinBank Securities JSC and Telecoms Informatics 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.