Correlation Between Construction and Saigon Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Construction and Saigon Telecommunicatio 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 Construction and Saigon Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction And Investment and Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Construction and Saigon Telecommunicatio 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 Construction with a short position of Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction and Saigon Telecommunicatio.
Diversification Opportunities for Construction and Saigon Telecommunicatio
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Construction and Saigon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Construction And Investment and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Construction 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 Construction And Investment are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Construction i.e., Construction and Saigon Telecommunicatio go up and down completely randomly.
Pair Corralation between Construction and Saigon Telecommunicatio
Assuming the 90 days trading horizon Construction And Investment is expected to under-perform the Saigon Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Construction And Investment is 1.82 times less risky than Saigon Telecommunicatio. The stock trades about -0.16 of its potential returns per unit of risk. The Saigon Telecommunication Technologies is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,665,000 in Saigon Telecommunication Technologies on October 25, 2024 and sell it today you would earn a total of 325,000 from holding Saigon Telecommunication Technologies or generate 19.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction And Investment vs. Saigon Telecommunication Techn
Performance |
| Timeline |
| Construction And Inv |
| Saigon Telecommunicatio |
Construction and Saigon Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction and Saigon Telecommunicatio
The main advantage of trading using opposite Construction and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction position performs unexpectedly, Saigon Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio's long position.| Construction vs. FIT INVEST JSC | Construction vs. Damsan JSC | Construction vs. An Phat Plastic | Construction vs. APG Securities Joint |
| Saigon Telecommunicatio vs. FIT INVEST JSC | Saigon Telecommunicatio vs. Damsan JSC | Saigon Telecommunicatio vs. An Phat Plastic | Saigon Telecommunicatio vs. APG Securities Joint |
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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