Correlation Between Vnsteel Vicasa and POT

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

By analyzing existing cross correlation between Vnsteel Vicasa JSC and PostTelecommunication Equipment, you can compare the effects of market volatilities on Vnsteel Vicasa and POT 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 Vnsteel Vicasa with a short position of POT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vnsteel Vicasa and POT.

Diversification Opportunities for Vnsteel Vicasa and POT

0.55

Correlation Coefficient

Vnsteel Vicasa  POT

Very weak diversification

The 3 months correlation between Vnsteel and POT is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC and PostTelecommunication Equipmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostTelecommunication and Vnsteel Vicasa 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 Vnsteel Vicasa JSC are associated (or correlated) with POT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostTelecommunication has no effect on the direction of Vnsteel Vicasa i.e., Vnsteel Vicasa and POT go up and down completely randomly.

Pair Corralation between Vnsteel Vicasa and POT

Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to under-perform the POT. But the stock apears to be less risky and, when comparing its historical volatility, Vnsteel Vicasa JSC is 1.67 times less risky than POT. The stock trades about -0.03 of its potential returns per unit of risk. The PostTelecommunication Equipment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,510,000  in PostTelecommunication Equipment on December 28, 2024 and sell it today you would earn a total of  50,000  from holding PostTelecommunication Equipment or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.41%
Values	Daily Returns

Vnsteel Vicasa JSC  vs.  PostTelecommunication Equipmen

Vnsteel Vicasa JSC

Risk-Adjusted Performance

Very Weak

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

PostTelecommunication

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Vnsteel Vicasa and POT

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

The idea behind Vnsteel Vicasa JSC and PostTelecommunication Equipment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.