Correlation Between Saigon Machinery and Mechanics Construction
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Mechanics 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 Machinery and Mechanics Construction 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 Mechanics Construction and, you can compare the effects of market volatilities on Saigon Machinery and Mechanics 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 Machinery with a short position of Mechanics Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Mechanics Construction.
Diversification Opportunities for Saigon Machinery and Mechanics Construction
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saigon and Mechanics is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Mechanics Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanics Construction 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 Mechanics Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechanics Construction has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Mechanics Construction go up and down completely randomly.
Pair Corralation between Saigon Machinery and Mechanics Construction
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 1.79 times more return on investment than Mechanics Construction. However, Saigon Machinery is 1.79 times more volatile than Mechanics Construction and. It trades about 0.09 of its potential returns per unit of risk. Mechanics Construction and is currently generating about 0.05 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 | Insignificant |
| Accuracy | 68.54% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Mechanics Construction and
Performance |
| Timeline |
| Saigon Machinery Spare |
| Mechanics Construction |
Saigon Machinery and Mechanics Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Mechanics Construction
The main advantage of trading using opposite Saigon Machinery and Mechanics Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Mechanics 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 Mechanics Construction will offset losses from the drop in Mechanics Construction'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 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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