Correlation Between Mekong Fisheries and Song Hong
Can any of the company-specific risk be diversified away by investing in both Mekong Fisheries and Song Hong 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 Mekong Fisheries and Song Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekong Fisheries JSC and Song Hong Construction, you can compare the effects of market volatilities on Mekong Fisheries and Song Hong 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 Mekong Fisheries with a short position of Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Song Hong.
Diversification Opportunities for Mekong Fisheries and Song Hong
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mekong and Song is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Song Hong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Construction and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Construction has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Song Hong go up and down completely randomly.
Pair Corralation between Mekong Fisheries and Song Hong
Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to generate 0.85 times more return on investment than Song Hong. However, Mekong Fisheries JSC is 1.17 times less risky than Song Hong. It trades about 0.13 of its potential returns per unit of risk. Song Hong Construction is currently generating about 0.1 per unit of risk. If you would invest 648,000 in Mekong Fisheries JSC on September 2, 2024 and sell it today you would earn a total of 49,000 from holding Mekong Fisheries JSC or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Mekong Fisheries JSC vs. Song Hong Construction
Performance |
| Timeline |
| Mekong Fisheries JSC |
| Song Hong Construction |
Mekong Fisheries and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekong Fisheries and Song Hong
The main advantage of trading using opposite Mekong Fisheries and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekong Fisheries position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| Mekong Fisheries vs. 1369 Construction JSC | Mekong Fisheries vs. Transport and Industry | Mekong Fisheries vs. Hai An Transport | Mekong Fisheries vs. Petrolimex Petrochemical JSC |
| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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