Correlation Between SCG Construction and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both SCG Construction and Vietnam Dairy 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 Vietnam Dairy 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 Vietnam Dairy Products, you can compare the effects of market volatilities on SCG Construction and Vietnam Dairy 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 Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Construction and Vietnam Dairy.
Diversification Opportunities for SCG Construction and Vietnam Dairy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCG and Vietnam is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SCG Construction JSC and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products 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 Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of SCG Construction i.e., SCG Construction and Vietnam Dairy go up and down completely randomly.
Pair Corralation between SCG Construction and Vietnam Dairy
Assuming the 90 days trading horizon SCG Construction JSC is expected to generate 0.54 times more return on investment than Vietnam Dairy. However, SCG Construction JSC is 1.86 times less risky than Vietnam Dairy. It trades about 0.1 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.23 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 | 100.0% |
| Values | Daily Returns |
SCG Construction JSC vs. Vietnam Dairy Products
Performance |
| Timeline |
| SCG Construction JSC |
| Vietnam Dairy Products |
SCG Construction and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Construction and Vietnam Dairy
The main advantage of trading using opposite SCG Construction and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Construction position performs unexpectedly, Vietnam Dairy 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 Dairy will offset losses from the drop in Vietnam Dairy's long position.| SCG Construction vs. FIT INVEST JSC | SCG Construction vs. Damsan JSC | SCG Construction vs. An Phat Plastic | SCG Construction vs. APG Securities Joint |
| Vietnam Dairy vs. FIT INVEST JSC | Vietnam Dairy vs. Damsan JSC | Vietnam Dairy vs. An Phat Plastic | Vietnam Dairy vs. APG Securities Joint |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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