Correlation Between Viet Thanh and Visicons Construction

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

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

Diversification Opportunities for Viet Thanh and Visicons Construction

-0.09

Correlation Coefficient

Viet Thanh  Visicons Construction

Good diversification

The 3 months correlation between Viet and Visicons is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Viet Thanh Plastic and Visicons Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visicons Construction and and Viet Thanh 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 Viet Thanh Plastic are associated (or correlated) with Visicons Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visicons Construction and has no effect on the direction of Viet Thanh i.e., Viet Thanh and Visicons Construction go up and down completely randomly.

Pair Corralation between Viet Thanh and Visicons Construction

Assuming the 90 days trading horizon Viet Thanh is expected to generate 2.27 times less return on investment than Visicons Construction. But when comparing it to its historical volatility, Viet Thanh Plastic is 1.98 times less risky than Visicons Construction. It trades about 0.07 of its potential returns per unit of risk. Visicons Construction and is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  600,125  in Visicons Construction and on October 26, 2024 and sell it today you would earn a total of  1,349,875  from holding Visicons Construction and or generate 224.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.71%
Values	Daily Returns

Viet Thanh Plastic  vs.  Visicons Construction and

Viet Thanh Plastic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viet Thanh Plastic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Viet Thanh is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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 very healthy basic indicators, Visicons Construction is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Viet Thanh and Visicons Construction

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

The idea behind Viet Thanh Plastic and Visicons Construction and 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.