Correlation Between SCG Construction and Saigon Thuong
Can any of the company-specific risk be diversified away by investing in both SCG Construction and Saigon Thuong 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 Saigon Thuong 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 Saigon Thuong Tin, you can compare the effects of market volatilities on SCG Construction and Saigon Thuong 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 Saigon Thuong. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and Saigon Thuong.
Diversification Opportunities for SCG Construction and Saigon Thuong
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCG and Saigon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and Saigon Thuong Tin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Thuong Tin 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 Saigon Thuong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Thuong Tin has no effect on the direction of SCG Construction i.e., SCG Construction and Saigon Thuong go up and down completely randomly.
Pair Corralation between SCG Construction and Saigon Thuong
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.26 times more return on investment than Saigon Thuong. However, SCG Construction JSC is 3.88 times less risky than Saigon Thuong. It trades about -0.01 of its potential returns per unit of risk. Saigon Thuong Tin is currently generating about -0.04 per unit of risk. If you would invest 6,610,000 in SCG Construction JSC on September 14, 2024 and sell it today you would lose (100,000) from holding SCG Construction JSC or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
SCG Construction JSC vs. Saigon Thuong Tin
Performance |
| Timeline |
| SCG Construction JSC |
| Saigon Thuong Tin |
SCG Construction and Saigon Thuong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and Saigon Thuong
The main advantage of trading using opposite SCG Construction and Saigon Thuong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, Saigon Thuong 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 Thuong will offset losses from the drop in Saigon Thuong'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 |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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