Correlation Between Saigon Machinery and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Hoang Huy 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 Hoang Huy 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 Hoang Huy Investment, you can compare the effects of market volatilities on Saigon Machinery and Hoang Huy 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 Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Hoang Huy.
Diversification Opportunities for Saigon Machinery and Hoang Huy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and Hoang is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment 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 Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Hoang Huy go up and down completely randomly.
Pair Corralation between Saigon Machinery and Hoang Huy
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 1.58 times more return on investment than Hoang Huy. However, Saigon Machinery is 1.58 times more volatile than Hoang Huy Investment. It trades about 0.09 of its potential returns per unit of risk. Hoang Huy Investment is currently generating about 0.07 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 Against |
| Strength | Very Weak |
| Accuracy | 61.6% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Hoang Huy Investment
Performance |
| Timeline |
| Saigon Machinery Spare |
| Hoang Huy Investment |
Saigon Machinery and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Hoang Huy
The main advantage of trading using opposite Saigon Machinery and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Hoang Huy 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 Hoang Huy will offset losses from the drop in Hoang Huy'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 |
| Hoang Huy vs. PV2 Investment JSC | Hoang Huy vs. Saigon Viendong Technology | Hoang Huy vs. Thanh Dat Investment | Hoang Huy vs. Riverway Management JSC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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