Correlation Between Saigon Thuong and SCG Construction
Can any of the company-specific risk be diversified away by investing in both Saigon Thuong and SCG Construction 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 Saigon Thuong and SCG Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Thuong Tin and SCG Construction JSC, you can compare the effects of market volatilities on Saigon Thuong and SCG Construction 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 Saigon Thuong with a short position of SCG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Thuong and SCG Construction.
Diversification Opportunities for Saigon Thuong and SCG Construction
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saigon and SCG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Thuong Tin and SCG Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG Construction JSC and Saigon Thuong 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 Saigon Thuong Tin are associated (or correlated) with SCG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG Construction JSC has no effect on the direction of Saigon Thuong i.e., Saigon Thuong and SCG Construction go up and down completely randomly.
Pair Corralation between Saigon Thuong and SCG Construction
Assuming the 90 days trading horizon Saigon Thuong Tin is expected to generate 7.08 times more return on investment than SCG Construction. However, Saigon Thuong is 7.08 times more volatile than SCG Construction JSC. It trades about 0.25 of its potential returns per unit of risk. SCG Construction JSC is currently generating about -0.05 per unit of risk. If you would invest 525,000 in Saigon Thuong Tin on September 13, 2024 and sell it today you would earn a total of 62,000 from holding Saigon Thuong Tin or generate 11.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Saigon Thuong Tin vs. SCG Construction JSC
Performance |
| Timeline |
| Saigon Thuong Tin |
| SCG Construction JSC |
Saigon Thuong and SCG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Thuong and SCG Construction
The main advantage of trading using opposite Saigon Thuong and SCG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Thuong position performs unexpectedly, SCG Construction 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 SCG Construction will offset losses from the drop in SCG Construction's long position.| Saigon Thuong vs. SCG Construction JSC | Saigon Thuong vs. Da Nang Construction | Saigon Thuong vs. Sea Air Freight | Saigon Thuong vs. PetroVietnam Transportation Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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