Correlation Between Sao Ta and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Sao Ta and Ducgiang Chemicals 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 Sao Ta and Ducgiang Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Sao Ta and Ducgiang Chemicals 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 Sao Ta with a short position of Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Ducgiang Chemicals.
Diversification Opportunities for Sao Ta and Ducgiang Chemicals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sao and Ducgiang is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals and Sao Ta 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 Sao Ta Foods are associated (or correlated) with Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Sao Ta i.e., Sao Ta and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Sao Ta and Ducgiang Chemicals
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.4 times more return on investment than Ducgiang Chemicals. However, Sao Ta Foods is 2.52 times less risky than Ducgiang Chemicals. It trades about 0.09 of its potential returns per unit of risk. Ducgiang Chemicals Detergent is currently generating about -0.22 per unit of risk. If you would invest 4,610,000 in Sao Ta Foods on August 31, 2024 and sell it today you would earn a total of 70,000 from holding Sao Ta Foods or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sao Ta Foods vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Sao Ta Foods |
| Ducgiang Chemicals |
Sao Ta and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and Ducgiang Chemicals
The main advantage of trading using opposite Sao Ta and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| Sao Ta vs. Techcom Vietnam REIT | Sao Ta vs. Da Nang Construction | Sao Ta vs. Saigon Viendong Technology | Sao Ta vs. Elcom Technology Communications |
| Ducgiang Chemicals vs. Techcom Vietnam REIT | Ducgiang Chemicals vs. BaoMinh Insurance Corp | Ducgiang Chemicals vs. Nafoods Group JSC | Ducgiang Chemicals vs. Petrovietnam Technical Services |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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