Correlation Between Viettel Construction and Tay Ninh

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

By analyzing existing cross correlation between Viettel Construction JSC and Tay Ninh Tourist, you can compare the effects of market volatilities on Viettel Construction and Tay Ninh 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 Viettel Construction with a short position of Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viettel Construction and Tay Ninh.

Diversification Opportunities for Viettel Construction and Tay Ninh

-0.29

Correlation Coefficient

Viettel Construction  Tay Ninh

Very good diversification

The 3 months correlation between Viettel and Tay is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC and Tay Ninh Tourist in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh Tourist and Viettel Construction 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 Viettel Construction JSC are associated (or correlated) with Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Tourist has no effect on the direction of Viettel Construction i.e., Viettel Construction and Tay Ninh go up and down completely randomly.

Pair Corralation between Viettel Construction and Tay Ninh

Assuming the 90 days trading horizon Viettel Construction is expected to generate 1.13 times less return on investment than Tay Ninh. But when comparing it to its historical volatility, Viettel Construction JSC is 2.12 times less risky than Tay Ninh. It trades about 0.13 of its potential returns per unit of risk. Tay Ninh Tourist is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,060,000  in Tay Ninh Tourist on September 29, 2024 and sell it today you would earn a total of  40,000  from holding Tay Ninh Tourist or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.43%
Values	Daily Returns

Viettel Construction JSC  vs.  Tay Ninh Tourist

Viettel Construction JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tay Ninh Tourist

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Viettel Construction and Tay Ninh

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

The idea behind Viettel Construction JSC and Tay Ninh Tourist 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..