Correlation Between Techno Agricultural and Vinhomes JSC

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

By analyzing existing cross correlation between Techno Agricultural Supplying and Vinhomes JSC, you can compare the effects of market volatilities on Techno Agricultural and Vinhomes JSC 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 Techno Agricultural with a short position of Vinhomes JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and Vinhomes JSC.

Diversification Opportunities for Techno Agricultural and Vinhomes JSC

0.53

Correlation Coefficient

Techno Agricultural  Vinhomes JSC

Very weak diversification

The 3 months correlation between Techno and Vinhomes is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and Vinhomes JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinhomes JSC and Techno Agricultural 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 Techno Agricultural Supplying are associated (or correlated) with Vinhomes JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinhomes JSC has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and Vinhomes JSC go up and down completely randomly.

Pair Corralation between Techno Agricultural and Vinhomes JSC

Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the Vinhomes JSC. But the stock apears to be less risky and, when comparing its historical volatility, Techno Agricultural Supplying is 1.63 times less risky than Vinhomes JSC. The stock trades about -0.22 of its potential returns per unit of risk. The Vinhomes JSC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,270,000  in Vinhomes JSC on September 27, 2024 and sell it today you would lose (210,000) from holding Vinhomes JSC or give up 4.92% of portfolio value over 90 days.

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

Techno Agricultural Supplying  vs.  Vinhomes JSC

Techno Agricultural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techno Agricultural Supplying has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Vinhomes JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Techno Agricultural and Vinhomes JSC

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

The idea behind Techno Agricultural Supplying and Vinhomes 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.