Correlation Between Vietnam Manufacturing and SIM Technology

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Can any of the company-specific risk be diversified away by investing in both Vietnam Manufacturing and SIM Technology 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 Manufacturing and SIM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Manufacturing and and SIM Technology Group, you can compare the effects of market volatilities on Vietnam Manufacturing and SIM Technology 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 Manufacturing with a short position of SIM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Manufacturing and SIM Technology.

Diversification Opportunities for Vietnam Manufacturing and SIM Technology

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Vietnam and SIM is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Manufacturing and and SIM Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIM Technology Group and Vietnam Manufacturing 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 Manufacturing and are associated (or correlated) with SIM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIM Technology Group has no effect on the direction of Vietnam Manufacturing i.e., Vietnam Manufacturing and SIM Technology go up and down completely randomly.

Pair Corralation between Vietnam Manufacturing and SIM Technology

Assuming the 90 days trading horizon Vietnam Manufacturing and is expected to generate 0.34 times more return on investment than SIM Technology. However, Vietnam Manufacturing and is 2.92 times less risky than SIM Technology. It trades about 0.02 of its potential returns per unit of risk. SIM Technology Group is currently generating about -0.01 per unit of risk. If you would invest  685.00  in Vietnam Manufacturing and on September 12, 2024 and sell it today you would earn a total of  14.00  from holding Vietnam Manufacturing and or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Vietnam Manufacturing and  vs.  SIM Technology Group

 Performance 
       Timeline  
Vietnam Manufacturing and 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vietnam Manufacturing and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Vietnam Manufacturing is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
SIM Technology Group 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SIM Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SIM Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Vietnam Manufacturing and SIM Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vietnam Manufacturing and SIM Technology

The main advantage of trading using opposite Vietnam Manufacturing and SIM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Manufacturing position performs unexpectedly, SIM Technology 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 SIM Technology will offset losses from the drop in SIM Technology's long position.
The idea behind Vietnam Manufacturing and and SIM Technology Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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