Correlation Between SMC Investment and Vnsteel Vicasa
Can any of the company-specific risk be diversified away by investing in both SMC Investment and Vnsteel Vicasa 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 SMC Investment and Vnsteel Vicasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Investment Trading and Vnsteel Vicasa JSC, you can compare the effects of market volatilities on SMC Investment and Vnsteel Vicasa 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 SMC Investment with a short position of Vnsteel Vicasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and Vnsteel Vicasa.
Diversification Opportunities for SMC Investment and Vnsteel Vicasa
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMC and Vnsteel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and Vnsteel Vicasa JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vnsteel Vicasa JSC and SMC Investment 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 SMC Investment Trading are associated (or correlated) with Vnsteel Vicasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vnsteel Vicasa JSC has no effect on the direction of SMC Investment i.e., SMC Investment and Vnsteel Vicasa go up and down completely randomly.
Pair Corralation between SMC Investment and Vnsteel Vicasa
Assuming the 90 days trading horizon SMC Investment Trading is expected to generate 0.78 times more return on investment than Vnsteel Vicasa. However, SMC Investment Trading is 1.28 times less risky than Vnsteel Vicasa. It trades about -0.02 of its potential returns per unit of risk. Vnsteel Vicasa JSC is currently generating about -0.48 per unit of risk. If you would invest 782,000 in SMC Investment Trading on October 12, 2024 and sell it today you would lose (16,000) from holding SMC Investment Trading or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMC Investment Trading vs. Vnsteel Vicasa JSC
Performance |
| Timeline |
| SMC Investment Trading |
| Vnsteel Vicasa JSC |
SMC Investment and Vnsteel Vicasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Investment and Vnsteel Vicasa
The main advantage of trading using opposite SMC Investment and Vnsteel Vicasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Investment position performs unexpectedly, Vnsteel Vicasa 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 Vnsteel Vicasa will offset losses from the drop in Vnsteel Vicasa's long position.| SMC Investment vs. Elcom Technology Communications | SMC Investment vs. Petrolimex Petrochemical JSC | SMC Investment vs. Pha Le Plastics | SMC Investment vs. Sao Vang Rubber |
| Vnsteel Vicasa vs. Danang Rubber JSC | Vnsteel Vicasa vs. Tien Phong Plastic | Vnsteel Vicasa vs. Thong Nhat Rubber | Vnsteel Vicasa vs. SMC Investment Trading |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |