Correlation Between Bim Son and Telecoms Informatics

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

By analyzing existing cross correlation between Bim Son Cement and Telecoms Informatics JSC, you can compare the effects of market volatilities on Bim Son and Telecoms Informatics 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 Bim Son with a short position of Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bim Son and Telecoms Informatics.

Diversification Opportunities for Bim Son and Telecoms Informatics

-0.75

Correlation Coefficient

Bim Son  Telecoms Informatics

Pay attention - limited upside

The 3 months correlation between Bim and Telecoms is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bim Son Cement and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC and Bim Son 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 Bim Son Cement are associated (or correlated) with Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Bim Son i.e., Bim Son and Telecoms Informatics go up and down completely randomly.

Pair Corralation between Bim Son and Telecoms Informatics

Assuming the 90 days trading horizon Bim Son Cement is expected to under-perform the Telecoms Informatics. In addition to that, Bim Son is 1.02 times more volatile than Telecoms Informatics JSC. It trades about -0.07 of its total potential returns per unit of risk. Telecoms Informatics JSC is currently generating about 0.04 per unit of volatility. If you would invest  1,116,379  in Telecoms Informatics JSC on September 30, 2024 and sell it today you would earn a total of  268,621  from holding Telecoms Informatics JSC or generate 24.06% return on investment over 90 days.

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

Bim Son Cement  vs.  Telecoms Informatics JSC

Bim Son Cement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bim Son Cement has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Telecoms Informatics JSC

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Bim Son and Telecoms Informatics

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

The idea behind Bim Son Cement and Telecoms Informatics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.