Correlation Between Sao Vang and VTC Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Sao Vang 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 Sao Vang and VTC Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Vang Rubber and VTC Telecommunications JSC, you can compare the effects of market volatilities on Sao Vang 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 Sao Vang with a short position of VTC Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Vang and VTC Telecommunicatio.
Diversification Opportunities for Sao Vang and VTC Telecommunicatio
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sao and VTC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sao Vang Rubber and VTC Telecommunications JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC Telecommunications and Sao Vang 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 Sao Vang Rubber 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 Sao Vang i.e., Sao Vang and VTC Telecommunicatio go up and down completely randomly.
Pair Corralation between Sao Vang and VTC Telecommunicatio
Assuming the 90 days trading horizon Sao Vang Rubber is expected to generate 2.82 times more return on investment than VTC Telecommunicatio. However, Sao Vang is 2.82 times more volatile than VTC Telecommunications JSC. It trades about 0.07 of its potential returns per unit of risk. VTC Telecommunications JSC is currently generating about 0.01 per unit of risk. If you would invest 2,480,000 in Sao Vang Rubber on September 20, 2024 and sell it today you would earn a total of 70,000 from holding Sao Vang Rubber or generate 2.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 80.95% |
Values | Daily Returns |
Sao Vang Rubber vs. VTC Telecommunications JSC
Performance |
Timeline |
Sao Vang Rubber |
VTC Telecommunications |
Sao Vang and VTC Telecommunicatio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sao Vang and VTC Telecommunicatio
The main advantage of trading using opposite Sao Vang and VTC Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Vang 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.Sao Vang vs. FIT INVEST JSC | Sao Vang vs. Damsan JSC | Sao Vang vs. An Phat Plastic | Sao Vang vs. Alphanam ME |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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