Correlation Between VTC Telecommunicatio and Saigon Telecommunicatio

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

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

Diversification Opportunities for VTC Telecommunicatio and Saigon Telecommunicatio

0.67

Correlation Coefficient

VTC Telecommunicatio  Saigon Telecommunicatio

Poor diversification

The 3 months correlation between VTC and Saigon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and VTC Telecommunicatio 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 VTC Telecommunications JSC 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 VTC Telecommunicatio i.e., VTC Telecommunicatio and Saigon Telecommunicatio go up and down completely randomly.

Pair Corralation between VTC Telecommunicatio and Saigon Telecommunicatio

Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 7.45 times less return on investment than Saigon Telecommunicatio. In addition to that, VTC Telecommunicatio is 2.08 times more volatile than Saigon Telecommunication Technologies. It trades about 0.0 of its total potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.06 per unit of volatility. If you would invest  1,180,000  in Saigon Telecommunication Technologies on December 5, 2024 and sell it today you would earn a total of  840,000  from holding Saigon Telecommunication Technologies or generate 71.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.82%
Values	Daily Returns

VTC Telecommunications JSC  vs.  Saigon Telecommunication Techn

VTC Telecommunications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VTC Telecommunications JSC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, VTC Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Saigon Telecommunicatio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 20 (%) 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 VTC Telecommunicatio and Saigon Telecommunicatio

The main advantage of trading using opposite VTC Telecommunicatio and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTC Telecommunicatio 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 VTC Telecommunications JSC 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.