Correlation Between Song Hong and Vina2 Investment
Can any of the company-specific risk be diversified away by investing in both Song Hong and Vina2 Investment 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 Vina2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Hong Aluminum and Vina2 Investment and, you can compare the effects of market volatilities on Song Hong and Vina2 Investment 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 Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Hong and Vina2 Investment.
Diversification Opportunities for Song Hong and Vina2 Investment
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Song and Vina2 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Song Hong Aluminum and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment 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 Aluminum are associated (or correlated) with Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of Song Hong i.e., Song Hong and Vina2 Investment go up and down completely randomly.
Pair Corralation between Song Hong and Vina2 Investment
Assuming the 90 days trading horizon Song Hong Aluminum is expected to generate 1.08 times more return on investment than Vina2 Investment. However, Song Hong is 1.08 times more volatile than Vina2 Investment and. It trades about -0.08 of its potential returns per unit of risk. Vina2 Investment and is currently generating about -0.1 per unit of risk. If you would invest 460,000 in Song Hong Aluminum on October 16, 2024 and sell it today you would lose (20,000) from holding Song Hong Aluminum or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Hong Aluminum vs. Vina2 Investment and
Performance |
| Timeline |
| Song Hong Aluminum |
| Vina2 Investment |
Song Hong and Vina2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Hong and Vina2 Investment
The main advantage of trading using opposite Song Hong and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Hong position performs unexpectedly, Vina2 Investment 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.| Song Hong vs. Pacific Petroleum Transportation | Song Hong vs. Din Capital Investment | Song Hong vs. Danang Education Investment | Song Hong vs. MST Investment JSC |
| Vina2 Investment vs. Danang Rubber JSC | Vina2 Investment vs. PetroVietnam Transportation Corp | Vina2 Investment vs. Transport and Industry | Vina2 Investment vs. Techno Agricultural Supplying |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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