Correlation Between Vincom Retail and Vietnam Airlines

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

By analyzing existing cross correlation between Vincom Retail JSC and Vietnam Airlines JSC, you can compare the effects of market volatilities on Vincom Retail and Vietnam Airlines 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 Vincom Retail with a short position of Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and Vietnam Airlines.

Diversification Opportunities for Vincom Retail and Vietnam Airlines

0.53

Correlation Coefficient

Vincom Retail  Vietnam Airlines

Very weak diversification

The 3 months correlation between Vincom and Vietnam is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines JSC and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Vincom Retail i.e., Vincom Retail and Vietnam Airlines go up and down completely randomly.

Pair Corralation between Vincom Retail and Vietnam Airlines

Assuming the 90 days trading horizon Vincom Retail JSC is expected to generate 0.57 times more return on investment than Vietnam Airlines. However, Vincom Retail JSC is 1.74 times less risky than Vietnam Airlines. It trades about 0.12 of its potential returns per unit of risk. Vietnam Airlines JSC is currently generating about -0.03 per unit of risk. If you would invest  1,705,000  in Vincom Retail JSC on December 23, 2024 and sell it today you would earn a total of  140,000  from holding Vincom Retail JSC or generate 8.21% return on investment over 90 days.

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

Vincom Retail JSC  vs.  Vietnam Airlines JSC

Vincom Retail JSC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vincom Retail JSC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Vincom Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Vietnam Airlines JSC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Vincom Retail and Vietnam Airlines

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

The idea behind Vincom Retail JSC and Vietnam Airlines JSC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.