Correlation Between Saigon Machinery and Visicons Construction
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Visicons 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 Visicons 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 Visicons Construction and, you can compare the effects of market volatilities on Saigon Machinery and Visicons 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 Visicons Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Visicons Construction.
Diversification Opportunities for Saigon Machinery and Visicons Construction
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and Visicons is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Visicons Construction and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visicons Construction and 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 Visicons Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visicons Construction and has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Visicons Construction go up and down completely randomly.
Pair Corralation between Saigon Machinery and Visicons Construction
Assuming the 90 days trading horizon Saigon Machinery is expected to generate 1.25 times less return on investment than Visicons Construction. But when comparing it to its historical volatility, Saigon Machinery Spare is 1.24 times less risky than Visicons Construction. It trades about 0.09 of its potential returns per unit of risk. Visicons Construction and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 592,528 in Visicons Construction and on October 16, 2024 and sell it today you would earn a total of 1,307,472 from holding Visicons Construction and or generate 220.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.64% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Visicons Construction and
Performance |
| Timeline |
| Saigon Machinery Spare |
| Visicons Construction and |
Saigon Machinery and Visicons Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Visicons Construction
The main advantage of trading using opposite Saigon Machinery and Visicons Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Visicons 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 Visicons Construction will offset losses from the drop in Visicons 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 |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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