Correlation Between Bao Ngoc and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both Bao Ngoc and Saigon Viendong 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 Bao Ngoc and Saigon Viendong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bao Ngoc Investment and Saigon Viendong Technology, you can compare the effects of market volatilities on Bao Ngoc and Saigon Viendong 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 Bao Ngoc with a short position of Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bao Ngoc and Saigon Viendong.
Diversification Opportunities for Bao Ngoc and Saigon Viendong
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bao and Saigon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bao Ngoc Investment and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech and Bao Ngoc 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 Bao Ngoc Investment are associated (or correlated) with Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of Bao Ngoc i.e., Bao Ngoc and Saigon Viendong go up and down completely randomly.
Pair Corralation between Bao Ngoc and Saigon Viendong
Assuming the 90 days trading horizon Bao Ngoc Investment is expected to generate 0.85 times more return on investment than Saigon Viendong. However, Bao Ngoc Investment is 1.18 times less risky than Saigon Viendong. It trades about -0.06 of its potential returns per unit of risk. Saigon Viendong Technology is currently generating about -0.11 per unit of risk. If you would invest 1,048,000 in Bao Ngoc Investment on September 2, 2024 and sell it today you would lose (88,000) from holding Bao Ngoc Investment or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Bao Ngoc Investment vs. Saigon Viendong Technology
Performance |
| Timeline |
| Bao Ngoc Investment |
| Saigon Viendong Tech |
Bao Ngoc and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bao Ngoc and Saigon Viendong
The main advantage of trading using opposite Bao Ngoc and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bao Ngoc position performs unexpectedly, Saigon Viendong 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 Saigon Viendong will offset losses from the drop in Saigon Viendong's long position.| Bao Ngoc vs. Innovative Technology Development | Bao Ngoc vs. Saigon Viendong Technology | Bao Ngoc vs. Petrovietnam Drilling Mud | Bao Ngoc vs. Construction And Investment |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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