Correlation Between Song Hong and Vietnam Airlines
Can any of the company-specific risk be diversified away by investing in both Song Hong and Vietnam Airlines 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 Vietnam Airlines 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 Vietnam Airlines JSC, you can compare the effects of market volatilities on Song Hong and Vietnam Airlines 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 Vietnam Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Vietnam Airlines.
Diversification Opportunities for Song Hong and Vietnam Airlines
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Song and Vietnam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Garment and Vietnam Airlines JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Airlines JSC 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 Vietnam Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Airlines JSC has no effect on the direction of Song Hong i.e., Song Hong and Vietnam Airlines go up and down completely randomly.
Pair Corralation between Song Hong and Vietnam Airlines
Assuming the 90 days trading horizon Song Hong is expected to generate 2.3 times less return on investment than Vietnam Airlines. But when comparing it to its historical volatility, Song Hong Garment is 2.05 times less risky than Vietnam Airlines. It trades about 0.31 of its potential returns per unit of risk. Vietnam Airlines JSC is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,250,000 in Vietnam Airlines JSC on September 2, 2024 and sell it today you would earn a total of 540,000 from holding Vietnam Airlines JSC or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Hong Garment vs. Vietnam Airlines JSC
Performance |
| Timeline |
| Song Hong Garment |
| Vietnam Airlines JSC |
Song Hong and Vietnam Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Vietnam Airlines
The main advantage of trading using opposite Song Hong and Vietnam Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong position performs unexpectedly, Vietnam Airlines 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 Vietnam Airlines will offset losses from the drop in Vietnam Airlines' long position.| Song Hong vs. FIT INVEST JSC | Song Hong vs. Damsan JSC | Song Hong vs. An Phat Plastic | Song Hong vs. Alphanam ME |
| Vietnam Airlines vs. Song Hong Garment | Vietnam Airlines vs. Alphanam ME | Vietnam Airlines vs. Hochiminh City Metal | Vietnam Airlines vs. Atesco Industrial Cartering |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |