Correlation Between Ha Long and VTC Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Ha Long and VTC Telecommunicatio 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 Ha Long and VTC Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ha Long Investment and VTC Telecommunications JSC, you can compare the effects of market volatilities on Ha Long and VTC Telecommunicatio 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 Ha Long with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ha Long and VTC Telecommunicatio.

Diversification Opportunities for Ha Long and VTC Telecommunicatio

0.33

Correlation Coefficient

Ha Long  VTC Telecommunicatio

Weak diversification

The 3 months correlation between HID and VTC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ha Long Investment and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and Ha Long 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 Ha Long Investment are associated (or correlated) with VTC Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC Telecommunications has no effect on the direction of Ha Long i.e., Ha Long and VTC Telecommunicatio go up and down completely randomly.

Pair Corralation between Ha Long and VTC Telecommunicatio

Assuming the 90 days trading horizon Ha Long Investment is expected to generate 0.31 times more return on investment than VTC Telecommunicatio. However, Ha Long Investment is 3.28 times less risky than VTC Telecommunicatio. It trades about 0.0 of its potential returns per unit of risk. VTC Telecommunications JSC is currently generating about -0.13 per unit of risk. If you would invest  271,000  in Ha Long Investment on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Ha Long Investment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Ha Long Investment  vs.  VTC Telecommunications JSC

Ha Long Investment

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ha Long Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Ha Long is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

VTC Telecommunications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VTC Telecommunications JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, VTC Telecommunicatio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ha Long and VTC Telecommunicatio

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

The idea behind Ha Long Investment and VTC Telecommunications 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.