Correlation Between Telecoms Informatics and Ha Long

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

Diversification Opportunities for Telecoms Informatics and Ha Long

-0.3

Correlation Coefficient

Telecoms Informatics  Ha Long

Very good diversification

The 3 months correlation between Telecoms and HID is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Telecoms Informatics JSC and Ha Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Long Investment 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 Ha Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Long Investment has no effect on the direction of Telecoms Informatics i.e., Telecoms Informatics and Ha Long go up and down completely randomly.

Pair Corralation between Telecoms Informatics and Ha Long

Assuming the 90 days trading horizon Telecoms Informatics is expected to generate 4.97 times less return on investment than Ha Long. In addition to that, Telecoms Informatics is 1.25 times more volatile than Ha Long Investment. It trades about 0.01 of its total potential returns per unit of risk. Ha Long Investment is currently generating about 0.05 per unit of volatility. If you would invest  266,000  in Ha Long Investment on December 29, 2024 and sell it today you would earn a total of  8,000  from holding Ha Long Investment or generate 3.01% return on investment over 90 days.

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

Telecoms Informatics JSC  vs.  Ha Long Investment

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.

Ha Long Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ha Long Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Telecoms Informatics and Ha Long

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

The idea behind Telecoms Informatics JSC and Ha Long Investment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.