Correlation Between Saigon Machinery and Saigon Beer
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Saigon Beer 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 Saigon Beer 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 Saigon Beer Alcohol, you can compare the effects of market volatilities on Saigon Machinery and Saigon Beer 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 Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Saigon Beer.
Diversification Opportunities for Saigon Machinery and Saigon Beer
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saigon and Saigon is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Saigon Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Beer Alcohol 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 Saigon Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Beer Alcohol has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Saigon Beer go up and down completely randomly.
Pair Corralation between Saigon Machinery and Saigon Beer
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 2.73 times more return on investment than Saigon Beer. However, Saigon Machinery is 2.73 times more volatile than Saigon Beer Alcohol. It trades about 0.09 of its potential returns per unit of risk. Saigon Beer Alcohol is currently generating about -0.05 per unit of risk. If you would invest 671,003 in Saigon Machinery Spare on October 17, 2024 and sell it today you would earn a total of 928,997 from holding Saigon Machinery Spare or generate 138.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.69% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Saigon Beer Alcohol
Performance |
| Timeline |
| Saigon Machinery Spare |
| Saigon Beer Alcohol |
Saigon Machinery and Saigon Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Saigon Beer
The main advantage of trading using opposite Saigon Machinery and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Saigon Beer 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 Beer will offset losses from the drop in Saigon Beer's long position.| Saigon Machinery vs. Vu Dang Investment | Saigon Machinery vs. PV2 Investment JSC | Saigon Machinery vs. Danang Education Investment | Saigon Machinery vs. CEO Group JSC |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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