Correlation Between CMC Investment and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both CMC Investment 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 CMC Investment and Saigon Viendong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMC Investment JSC and Saigon Viendong Technology, you can compare the effects of market volatilities on CMC Investment 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 CMC Investment with a short position of Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMC Investment and Saigon Viendong.
Diversification Opportunities for CMC Investment and Saigon Viendong
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMC and Saigon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CMC Investment JSC 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 CMC Investment 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 CMC Investment JSC 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 CMC Investment i.e., CMC Investment and Saigon Viendong go up and down completely randomly.
Pair Corralation between CMC Investment and Saigon Viendong
Assuming the 90 days trading horizon CMC Investment JSC is expected to generate 2.34 times more return on investment than Saigon Viendong. However, CMC Investment is 2.34 times more volatile than Saigon Viendong Technology. It trades about 0.03 of its potential returns per unit of risk. Saigon Viendong Technology is currently generating about 0.04 per unit of risk. If you would invest 560,000 in CMC Investment JSC on September 4, 2024 and sell it today you would lose (10,000) from holding CMC Investment JSC or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.88% |
| Values | Daily Returns |
CMC Investment JSC vs. Saigon Viendong Technology
Performance |
| Timeline |
| CMC Investment JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saigon Viendong Tech |
CMC Investment and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMC Investment and Saigon Viendong
The main advantage of trading using opposite CMC Investment and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMC Investment 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.| CMC Investment vs. VTC Telecommunications JSC | CMC Investment vs. Nafoods Group JSC | CMC Investment vs. Industrial Urban Development | CMC Investment vs. Tri Viet Management |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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