Correlation Between Telecoms Informatics and VietinBank Securities

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

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

Diversification Opportunities for Telecoms Informatics and VietinBank Securities

-0.4

Correlation Coefficient

Telecoms Informatics  VietinBank Securities

Very good diversification

The 3 months correlation between Telecoms and VietinBank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and VietinBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VietinBank Securities JSC and Telecoms Informatics 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 Telecoms Informatics JSC are associated (or correlated) with VietinBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VietinBank Securities JSC has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and VietinBank Securities go up and down completely randomly.

Pair Corralation between Telecoms Informatics and VietinBank Securities

Assuming the 90 days trading horizon Telecoms Informatics is expected to generate 220.3 times less return on investment than VietinBank Securities. But when comparing it to its historical volatility, Telecoms Informatics JSC is 1.6 times less risky than VietinBank Securities. It trades about 0.0 of its potential returns per unit of risk. VietinBank Securities JSC is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest  3,340,000  in VietinBank Securities JSC on December 3, 2024 and sell it today you would earn a total of  570,000  from holding VietinBank Securities JSC or generate 17.07% return on investment over 90 days.

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

Telecoms Informatics JSC  vs.  VietinBank Securities JSC

Telecoms Informatics JSC

Risk-Adjusted Performance

Insignificant

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

VietinBank Securities JSC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VietinBank Securities JSC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VietinBank Securities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Telecoms Informatics and VietinBank Securities

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

The idea behind Telecoms Informatics JSC and VietinBank Securities 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.