Correlation Between Post and VTC Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Post 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 Post and VTC Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and VTC Telecommunications JSC, you can compare the effects of market volatilities on Post 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 Post with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and VTC Telecommunicatio.
Diversification Opportunities for Post and VTC Telecommunicatio
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Post and VTC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and Post 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 Post and Telecommunications 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 Post i.e., Post and VTC Telecommunicatio go up and down completely randomly.
Pair Corralation between Post and VTC Telecommunicatio
Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 0.99 times more return on investment than VTC Telecommunicatio. However, Post and Telecommunications is 1.01 times less risky than VTC Telecommunicatio. It trades about 0.04 of its potential returns per unit of risk. VTC Telecommunications JSC is currently generating about 0.03 per unit of risk. If you would invest 518,000 in Post and Telecommunications on December 5, 2024 and sell it today you would earn a total of 42,000 from holding Post and Telecommunications or generate 8.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 92.62% |
Values | Daily Returns |
Post and Telecommunications vs. VTC Telecommunications JSC
Performance |
Timeline |
Post and Telecommuni |
VTC Telecommunications |
Post and VTC Telecommunicatio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Post and VTC Telecommunicatio
The main advantage of trading using opposite Post and VTC Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post 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.Post vs. SCG Construction JSC | Post vs. Transport and Industry | Post vs. Saigon Viendong Technology | Post vs. Development Investment Construction |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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