Correlation Between Techcom Vietnam and Vu Dang

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

By analyzing existing cross correlation between Techcom Vietnam REIT and Vu Dang Investment, you can compare the effects of market volatilities on Techcom Vietnam and Vu Dang 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 Techcom Vietnam with a short position of Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techcom Vietnam and Vu Dang.

Diversification Opportunities for Techcom Vietnam and Vu Dang

0.07

Correlation Coefficient

Techcom Vietnam  Vu Dang

Significant diversification

The 3 months correlation between Techcom and SVD is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Techcom Vietnam REIT and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment and Techcom Vietnam 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 Techcom Vietnam REIT are associated (or correlated) with Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Techcom Vietnam i.e., Techcom Vietnam and Vu Dang go up and down completely randomly.

Pair Corralation between Techcom Vietnam and Vu Dang

Assuming the 90 days trading horizon Techcom Vietnam REIT is expected to under-perform the Vu Dang. But the stock apears to be less risky and, when comparing its historical volatility, Techcom Vietnam REIT is 1.05 times less risky than Vu Dang. The stock trades about 0.0 of its potential returns per unit of risk. The Vu Dang Investment is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  319,000  in Vu Dang Investment on April 4, 2025 and sell it today you would earn a total of  61,000  from holding Vu Dang Investment or generate 19.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.02%
Values	Daily Returns

Techcom Vietnam REIT  vs.  Vu Dang Investment

Techcom Vietnam REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Techcom Vietnam REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Techcom Vietnam is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Vu Dang Investment

Risk-Adjusted Performance

OK

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

Pair Trading with Techcom Vietnam and Vu Dang

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

The idea behind Techcom Vietnam REIT and Vu Dang Investment 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.