Correlation Between Saigon Machinery and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Vietnam Petroleum 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 Vietnam Petroleum 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 Vietnam Petroleum Transport, you can compare the effects of market volatilities on Saigon Machinery and Vietnam Petroleum 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 Vietnam Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Vietnam Petroleum.
Diversification Opportunities for Saigon Machinery and Vietnam Petroleum
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saigon and Vietnam is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum 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 Vietnam Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Petroleum has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Saigon Machinery and Vietnam Petroleum
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 0.71 times more return on investment than Vietnam Petroleum. However, Saigon Machinery Spare is 1.41 times less risky than Vietnam Petroleum. It trades about 0.45 of its potential returns per unit of risk. Vietnam Petroleum Transport is currently generating about 0.21 per unit of risk. If you would invest 1,570,000 in Saigon Machinery Spare on November 7, 2024 and sell it today you would earn a total of 30,000 from holding Saigon Machinery Spare or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.25% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Saigon Machinery Spare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
| Vietnam Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Saigon Machinery and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Vietnam Petroleum
The main advantage of trading using opposite Saigon Machinery and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Vietnam Petroleum 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 Vietnam Petroleum will offset losses from the drop in Vietnam Petroleum'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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