Correlation Between Vietnam Technological and AgriBank Securities

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

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

Diversification Opportunities for Vietnam Technological and AgriBank Securities

0.54

Correlation Coefficient

Vietnam Technological  AgriBank Securities

Very weak diversification

The 3 months correlation between Vietnam and AgriBank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Technological And and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Vietnam Technological 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 Vietnam Technological And are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Vietnam Technological i.e., Vietnam Technological and AgriBank Securities go up and down completely randomly.

Pair Corralation between Vietnam Technological and AgriBank Securities

Assuming the 90 days trading horizon Vietnam Technological And is expected to generate 0.59 times more return on investment than AgriBank Securities. However, Vietnam Technological And is 1.7 times less risky than AgriBank Securities. It trades about 0.12 of its potential returns per unit of risk. AgriBank Securities JSC is currently generating about 0.02 per unit of risk. If you would invest  2,230,000  in Vietnam Technological And on September 12, 2024 and sell it today you would earn a total of  175,000  from holding Vietnam Technological And or generate 7.85% return on investment over 90 days.

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

Vietnam Technological And  vs.  AgriBank Securities JSC

Vietnam Technological And

Risk-Adjusted Performance

9 of 100

OK

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

AgriBank Securities JSC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AgriBank Securities JSC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AgriBank Securities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vietnam Technological and AgriBank Securities

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

The idea behind Vietnam Technological And and AgriBank Securities 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.