Correlation Between VTC Telecommunicatio and Transimex Transportation

Can any of the company-specific risk be diversified away by investing in both VTC Telecommunicatio and Transimex Transportation 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 VTC Telecommunicatio and Transimex Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VTC Telecommunications JSC and Transimex Transportation JSC, you can compare the effects of market volatilities on VTC Telecommunicatio and Transimex Transportation 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 VTC Telecommunicatio with a short position of Transimex Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTC Telecommunicatio and Transimex Transportation.

Diversification Opportunities for VTC Telecommunicatio and Transimex Transportation

0.15

Correlation Coefficient

VTC Telecommunicatio  Transimex Transportation

Average diversification

The 3 months correlation between VTC and Transimex is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding VTC Telecommunications JSC and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation and VTC Telecommunicatio 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 VTC Telecommunications JSC are associated (or correlated) with Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of VTC Telecommunicatio i.e., VTC Telecommunicatio and Transimex Transportation go up and down completely randomly.

Pair Corralation between VTC Telecommunicatio and Transimex Transportation

Assuming the 90 days trading horizon VTC Telecommunicatio is expected to generate 2.35 times less return on investment than Transimex Transportation. In addition to that, VTC Telecommunicatio is 2.31 times more volatile than Transimex Transportation JSC. It trades about 0.03 of its total potential returns per unit of risk. Transimex Transportation JSC is currently generating about 0.16 per unit of volatility. If you would invest  1,740,000  in Transimex Transportation JSC on May 14, 2025 and sell it today you would earn a total of  210,000  from holding Transimex Transportation JSC or generate 12.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.59%
Values	Daily Returns

VTC Telecommunications JSC  vs.  Transimex Transportation JSC

VTC Telecommunications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VTC Telecommunications JSC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, VTC Telecommunicatio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Transimex Transportation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transimex Transportation JSC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Transimex Transportation displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VTC Telecommunicatio and Transimex Transportation

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

The idea behind VTC Telecommunications JSC and Transimex Transportation 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.