Correlation Between Visicons Construction and Saigon Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Visicons Construction and Saigon 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 Visicons Construction and Saigon Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visicons Construction and and Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Visicons Construction and Saigon 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 Visicons Construction with a short position of Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visicons Construction and Saigon Telecommunicatio.

Diversification Opportunities for Visicons Construction and Saigon Telecommunicatio

-0.45

Correlation Coefficient

Visicons Construction  Saigon Telecommunicatio

Very good diversification

The 3 months correlation between Visicons and Saigon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Visicons Construction and and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Visicons Construction 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 Visicons Construction and are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Visicons Construction i.e., Visicons Construction and Saigon Telecommunicatio go up and down completely randomly.

Pair Corralation between Visicons Construction and Saigon Telecommunicatio

Assuming the 90 days trading horizon Visicons Construction and is expected to generate 2.16 times more return on investment than Saigon Telecommunicatio. However, Visicons Construction is 2.16 times more volatile than Saigon Telecommunication Technologies. It trades about 0.07 of its potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.03 per unit of risk. If you would invest  774,844  in Visicons Construction and on October 11, 2024 and sell it today you would earn a total of  1,155,156  from holding Visicons Construction and or generate 149.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.1%
Values	Daily Returns

Visicons Construction and  vs.  Saigon Telecommunication Techn

Visicons Construction and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visicons Construction and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Saigon Telecommunicatio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Saigon Telecommunicatio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visicons Construction and Saigon Telecommunicatio

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

The idea behind Visicons Construction and and Saigon Telecommunication Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.