Correlation Between Saigon Machinery and Vincom Retail
Can any of the company-specific risk be diversified away by investing in both Saigon Machinery and Vincom Retail 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 Vincom Retail 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 Vincom Retail JSC, you can compare the effects of market volatilities on Saigon Machinery and Vincom Retail 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 Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Machinery and Vincom Retail.
Diversification Opportunities for Saigon Machinery and Vincom Retail
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saigon and Vincom is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Machinery Spare and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC 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 Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Saigon Machinery i.e., Saigon Machinery and Vincom Retail go up and down completely randomly.
Pair Corralation between Saigon Machinery and Vincom Retail
Assuming the 90 days trading horizon Saigon Machinery Spare is expected to generate 2.09 times more return on investment than Vincom Retail. However, Saigon Machinery is 2.09 times more volatile than Vincom Retail JSC. It trades about 0.09 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.06 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 | Weak |
| Accuracy | 60.69% |
| Values | Daily Returns |
Saigon Machinery Spare vs. Vincom Retail JSC
Performance |
| Timeline |
| Saigon Machinery Spare |
| Vincom Retail JSC |
Saigon Machinery and Vincom Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Machinery and Vincom Retail
The main advantage of trading using opposite Saigon Machinery and Vincom Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Machinery position performs unexpectedly, Vincom Retail 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 Vincom Retail will offset losses from the drop in Vincom Retail'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 |
| Vincom Retail vs. TDT Investment and | Vincom Retail vs. Thanh Dat Investment | Vincom Retail vs. South Basic Chemicals | Vincom Retail vs. Bao Ngoc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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