Correlation Between Hochiminh City and Saigon Thuong
Can any of the company-specific risk be diversified away by investing in both Hochiminh City and Saigon Thuong 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 Hochiminh City and Saigon Thuong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hochiminh City Metal and Saigon Thuong Tin, you can compare the effects of market volatilities on Hochiminh City and Saigon Thuong 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 Hochiminh City with a short position of Saigon Thuong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochiminh City and Saigon Thuong.
Diversification Opportunities for Hochiminh City and Saigon Thuong
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hochiminh and Saigon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hochiminh City Metal and Saigon Thuong Tin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Thuong Tin and Hochiminh City 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 Hochiminh City Metal are associated (or correlated) with Saigon Thuong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Thuong Tin has no effect on the direction of Hochiminh City i.e., Hochiminh City and Saigon Thuong go up and down completely randomly.
Pair Corralation between Hochiminh City and Saigon Thuong
Assuming the 90 days trading horizon Hochiminh City Metal is expected to generate 0.65 times more return on investment than Saigon Thuong. However, Hochiminh City Metal is 1.54 times less risky than Saigon Thuong. It trades about 0.04 of its potential returns per unit of risk. Saigon Thuong Tin is currently generating about 0.02 per unit of risk. If you would invest 906,537 in Hochiminh City Metal on September 14, 2024 and sell it today you would earn a total of 253,463 from holding Hochiminh City Metal or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hochiminh City Metal vs. Saigon Thuong Tin
Performance |
| Timeline |
| Hochiminh City Metal |
| Saigon Thuong Tin |
Hochiminh City and Saigon Thuong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochiminh City and Saigon Thuong
The main advantage of trading using opposite Hochiminh City and Saigon Thuong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochiminh City position performs unexpectedly, Saigon Thuong 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 Thuong will offset losses from the drop in Saigon Thuong's long position.| Hochiminh City vs. FIT INVEST JSC | Hochiminh City vs. Damsan JSC | Hochiminh City vs. An Phat Plastic | Hochiminh City vs. Alphanam ME |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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