Correlation Between Sea Air and Saigon Thuong
Can any of the company-specific risk be diversified away by investing in both Sea Air 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 Sea Air and Saigon Thuong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Air Freight and Saigon Thuong Tin, you can compare the effects of market volatilities on Sea Air 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 Sea Air with a short position of Saigon Thuong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Air and Saigon Thuong.
Diversification Opportunities for Sea Air and Saigon Thuong
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sea and Saigon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sea Air Freight 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 Sea Air 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 Sea Air Freight 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 Sea Air i.e., Sea Air and Saigon Thuong go up and down completely randomly.
Pair Corralation between Sea Air and Saigon Thuong
Assuming the 90 days trading horizon Sea Air Freight is expected to generate 1.07 times more return on investment than Saigon Thuong. However, Sea Air is 1.07 times more volatile than Saigon Thuong Tin. It trades about 0.03 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 2,951,870 in Sea Air Freight on September 14, 2024 and sell it today you would earn a total of 238,130 from holding Sea Air Freight or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.71% |
| Values | Daily Returns |
Sea Air Freight vs. Saigon Thuong Tin
Performance |
| Timeline |
| Sea Air Freight |
| Saigon Thuong Tin |
Sea Air and Saigon Thuong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea Air and Saigon Thuong
The main advantage of trading using opposite Sea Air and Saigon Thuong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Air 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.The idea behind Sea Air Freight and Saigon Thuong Tin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saigon Thuong vs. Song Hong Garment | Saigon Thuong vs. Alphanam ME | Saigon Thuong vs. Hochiminh City Metal | Saigon Thuong vs. Atesco Industrial Cartering |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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