Correlation Between Song Hong and Danang Education
Can any of the company-specific risk be diversified away by investing in both Song Hong and Danang Education 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 Danang Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Garment and Danang Education Investment, you can compare the effects of market volatilities on Song Hong and Danang Education 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 Danang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Danang Education.
Diversification Opportunities for Song Hong and Danang Education
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Song and Danang is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Garment and Danang Education Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Education Inv 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 Garment are associated (or correlated) with Danang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Education Inv has no effect on the direction of Song Hong i.e., Song Hong and Danang Education go up and down completely randomly.
Pair Corralation between Song Hong and Danang Education
Assuming the 90 days trading horizon Song Hong Garment is expected to generate 0.46 times more return on investment than Danang Education. However, Song Hong Garment is 2.19 times less risky than Danang Education. It trades about 0.13 of its potential returns per unit of risk. Danang Education Investment is currently generating about 0.01 per unit of risk. If you would invest 4,485,882 in Song Hong Garment on September 2, 2024 and sell it today you would earn a total of 434,118 from holding Song Hong Garment or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.75% |
| Values | Daily Returns |
Song Hong Garment vs. Danang Education Investment
Performance |
| Timeline |
| Song Hong Garment |
| Danang Education Inv |
Song Hong and Danang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Danang Education
The main advantage of trading using opposite Song Hong and Danang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong position performs unexpectedly, Danang Education 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 Danang Education will offset losses from the drop in Danang Education's long position.| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
| Danang Education vs. SCG Construction JSC | Danang Education vs. Song Hong Construction | Danang Education vs. Viet Thanh Plastic | Danang Education vs. Binhthuan Agriculture 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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