Correlation Between Saigon Machinery and Saigon Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Saigon Telecommunicatio 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 Telecommunicatio 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 Telecommunication Technologies, you can compare the effects of market volatilities on Saigon Machinery and Saigon Telecommunicatio 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 Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Saigon Telecommunicatio.
Diversification Opportunities for Saigon Machinery and Saigon Telecommunicatio
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and Saigon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio 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 Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Saigon Telecommunicatio go up and down completely randomly.
Pair Corralation between Saigon Machinery and Saigon Telecommunicatio
Assuming the 90 days trading horizon Saigon Machinery is expected to generate 2.67 times less return on investment than Saigon Telecommunicatio. But when comparing it to its historical volatility, Saigon Machinery Spare is 1.64 times less risky than Saigon Telecommunicatio. It trades about 0.45 of its potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.73 of returns per unit of risk over similar time horizon. If you would invest 1,690,000 in Saigon Telecommunication Technologies on November 7, 2024 and sell it today you would earn a total of 295,000 from holding Saigon Telecommunication Technologies or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.25% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Saigon Telecommunication Techn
Performance |
| Timeline |
| Saigon Machinery Spare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
| Saigon Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Saigon Machinery and Saigon Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Saigon Telecommunicatio
The main advantage of trading using opposite Saigon Machinery and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Saigon Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio's long position.| Saigon Machinery vs. Transport and Industry | Saigon Machinery vs. Innovative Technology Development | Saigon Machinery vs. Vietnam JSCmmercial Bank | Saigon Machinery vs. Elcom Technology Communications |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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