Correlation Between Song Hong and Saigon Thuong
Can any of the company-specific risk be diversified away by investing in both Song Hong 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 Song Hong and Saigon Thuong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Construction and Saigon Thuong Tin, you can compare the effects of market volatilities on Song Hong 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 Song Hong with a short position of Saigon Thuong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Saigon Thuong.
Diversification Opportunities for Song Hong and Saigon Thuong
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Song and Saigon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Construction 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 Song Hong 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 Song Hong Construction 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 Song Hong i.e., Song Hong and Saigon Thuong go up and down completely randomly.
Pair Corralation between Song Hong and Saigon Thuong
Assuming the 90 days trading horizon Song Hong is expected to generate 1.44 times less return on investment than Saigon Thuong. In addition to that, Song Hong is 2.14 times more volatile than Saigon Thuong Tin. It trades about 0.03 of its total potential returns per unit of risk. Saigon Thuong Tin is currently generating about 0.08 per unit of volatility. If you would invest 541,000 in Saigon Thuong Tin on September 12, 2024 and sell it today you would earn a total of 46,000 from holding Saigon Thuong Tin or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.31% |
| Values | Daily Returns |
Song Hong Construction vs. Saigon Thuong Tin
Performance |
| Timeline |
| Song Hong Construction |
| Saigon Thuong Tin |
Song Hong and Saigon Thuong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Saigon Thuong
The main advantage of trading using opposite Song Hong and Saigon Thuong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong 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.| Song Hong vs. Binhthuan Agriculture Services | Song Hong vs. Military Insurance Corp | Song Hong vs. Educational Book In | Song Hong vs. Agriculture Printing and |
| Saigon Thuong vs. Saigon Viendong Technology | Saigon Thuong vs. Bao Ngoc Investment | Saigon Thuong vs. Petrovietnam Technical Services | Saigon Thuong vs. TDG Global Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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