Correlation Between South Basic and Mekong Fisheries
Can any of the company-specific risk be diversified away by investing in both South Basic and Mekong Fisheries 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 South Basic and Mekong Fisheries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and Mekong Fisheries JSC, you can compare the effects of market volatilities on South Basic and Mekong Fisheries 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 South Basic with a short position of Mekong Fisheries. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and Mekong Fisheries.
Diversification Opportunities for South Basic and Mekong Fisheries
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between South and Mekong is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and Mekong Fisheries JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mekong Fisheries JSC and South Basic 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 South Basic Chemicals are associated (or correlated) with Mekong Fisheries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mekong Fisheries JSC has no effect on the direction of South Basic i.e., South Basic and Mekong Fisheries go up and down completely randomly.
Pair Corralation between South Basic and Mekong Fisheries
Assuming the 90 days trading horizon South Basic Chemicals is expected to under-perform the Mekong Fisheries. In addition to that, South Basic is 2.47 times more volatile than Mekong Fisheries JSC. It trades about -0.05 of its total potential returns per unit of risk. Mekong Fisheries JSC is currently generating about -0.04 per unit of volatility. If you would invest 1,166,128 in Mekong Fisheries JSC on August 26, 2024 and sell it today you would lose (476,128) from holding Mekong Fisheries JSC or give up 40.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
South Basic Chemicals vs. Mekong Fisheries JSC
Performance |
| Timeline |
| South Basic Chemicals |
| Mekong Fisheries JSC |
South Basic and Mekong Fisheries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and Mekong Fisheries
The main advantage of trading using opposite South Basic and Mekong Fisheries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, Mekong Fisheries 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 Mekong Fisheries will offset losses from the drop in Mekong Fisheries' long position.| South Basic vs. Sao Vang Rubber | South Basic vs. Pha Lai Thermal | South Basic vs. Century Synthetic Fiber | South Basic vs. BaoMinh Insurance Corp |
| Mekong Fisheries vs. Dinhvu Port Investment | Mekong Fisheries vs. Transimex Transportation JSC | Mekong Fisheries vs. Ha Long Investment | Mekong Fisheries vs. South Basic Chemicals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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