Correlation Between Saigon Machinery and Danang Education
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Danang Education 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 Machinery and Danang Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Machinery Spare and Danang Education Investment, you can compare the effects of market volatilities on Saigon Machinery and Danang Education 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 Machinery with a short position of Danang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Danang Education.
Diversification Opportunities for Saigon Machinery and Danang Education
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Saigon and Danang is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Danang Education Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Education Inv and Saigon Machinery 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 Machinery Spare are associated (or correlated) with Danang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Education Inv has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Danang Education go up and down completely randomly.
Pair Corralation between Saigon Machinery and Danang Education
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 1.02 times more return on investment than Danang Education. However, Saigon Machinery is 1.02 times more volatile than Danang Education Investment. It trades about 0.09 of its potential returns per unit of risk. Danang Education Investment is currently generating about 0.04 per unit of risk. If you would invest 739,967 in Saigon Machinery Spare on October 16, 2024 and sell it today you would earn a total of 860,033 from holding Saigon Machinery Spare or generate 116.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.02% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Danang Education Investment
Performance |
| Timeline |
| Saigon Machinery Spare |
| Danang Education Inv |
Saigon Machinery and Danang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Danang Education
The main advantage of trading using opposite Saigon Machinery and Danang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Danang Education 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 Danang Education will offset losses from the drop in Danang Education's long position.| Saigon Machinery vs. Tien Giang Investment | Saigon Machinery vs. VTC Telecommunications JSC | Saigon Machinery vs. MST Investment JSC | Saigon Machinery vs. Din Capital Investment |
| Danang Education vs. Century Synthetic Fiber | Danang Education vs. Binh Duong Construction | Danang Education vs. Techno Agricultural Supplying | Danang Education vs. BIDV Insurance Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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