Correlation Between SCG Construction and Ha Noi
Can any of the company-specific risk be diversified away by investing in both SCG Construction and Ha Noi 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 SCG Construction and Ha Noi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Construction JSC and Ha Noi Education, you can compare the effects of market volatilities on SCG Construction and Ha Noi 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 SCG Construction with a short position of Ha Noi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and Ha Noi.
Diversification Opportunities for SCG Construction and Ha Noi
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCG and EID is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and Ha Noi Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Noi Education and SCG 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 SCG Construction JSC are associated (or correlated) with Ha Noi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Noi Education has no effect on the direction of SCG Construction i.e., SCG Construction and Ha Noi go up and down completely randomly.
Pair Corralation between SCG Construction and Ha Noi
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.65 times more return on investment than Ha Noi. However, SCG Construction JSC is 1.54 times less risky than Ha Noi. It trades about 0.1 of its potential returns per unit of risk. Ha Noi Education is currently generating about -0.19 per unit of risk. If you would invest 6,550,000 in SCG Construction JSC on August 30, 2024 and sell it today you would earn a total of 50,000 from holding SCG Construction JSC or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SCG Construction JSC vs. Ha Noi Education
Performance |
| Timeline |
| SCG Construction JSC |
| Ha Noi Education |
SCG Construction and Ha Noi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and Ha Noi
The main advantage of trading using opposite SCG Construction and Ha Noi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, Ha Noi 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 Ha Noi will offset losses from the drop in Ha Noi's long position.| SCG Construction vs. FIT INVEST JSC | SCG Construction vs. Damsan JSC | SCG Construction vs. An Phat Plastic | SCG Construction vs. Alphanam ME |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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