Correlation Between Telecoms Informatics and Techcom Vietnam

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

Diversification Opportunities for Telecoms Informatics and Techcom Vietnam

-0.27

Correlation Coefficient

Telecoms Informatics  Techcom Vietnam

Very good diversification

The 3 months correlation between Telecoms and Techcom is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and Techcom Vietnam REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techcom Vietnam REIT 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 Techcom Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techcom Vietnam REIT has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and Techcom Vietnam go up and down completely randomly.

Pair Corralation between Telecoms Informatics and Techcom Vietnam

Assuming the 90 days trading horizon Telecoms Informatics JSC is expected to under-perform the Techcom Vietnam. But the stock apears to be less risky and, when comparing its historical volatility, Telecoms Informatics JSC is 1.87 times less risky than Techcom Vietnam. The stock trades about 0.0 of its potential returns per unit of risk. The Techcom Vietnam REIT is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  545,000  in Techcom Vietnam REIT on December 25, 2024 and sell it today you would earn a total of  24,000  from holding Techcom Vietnam REIT or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.48%
Values	Daily Returns

Telecoms Informatics JSC  vs.  Techcom Vietnam REIT

Telecoms Informatics JSC

Risk-Adjusted Performance

Very Weak

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

Techcom Vietnam REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Techcom Vietnam REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Techcom Vietnam may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Telecoms Informatics and Techcom Vietnam

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

The idea behind Telecoms Informatics JSC and Techcom Vietnam REIT 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 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.