Correlation Between Saigon Viendong and Dong A
Can any of the company-specific risk be diversified away by investing in both Saigon Viendong and Dong A 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 Viendong and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Viendong Technology and Dong A Hotel, you can compare the effects of market volatilities on Saigon Viendong and Dong A 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 Viendong with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Viendong and Dong A.
Diversification Opportunities for Saigon Viendong and Dong A
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saigon and Dong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Viendong Technology and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and Saigon Viendong 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 Viendong Technology are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Saigon Viendong i.e., Saigon Viendong and Dong A go up and down completely randomly.
Pair Corralation between Saigon Viendong and Dong A
Assuming the 90 days trading horizon Saigon Viendong Technology is expected to generate 1.06 times more return on investment than Dong A. However, Saigon Viendong is 1.06 times more volatile than Dong A Hotel. It trades about 0.01 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.08 per unit of risk. If you would invest 1,190,000 in Saigon Viendong Technology on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Saigon Viendong Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Saigon Viendong Technology vs. Dong A Hotel
Performance |
| Timeline |
| Saigon Viendong Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Dong A Hotel |
Saigon Viendong and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Viendong and Dong A
The main advantage of trading using opposite Saigon Viendong and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Viendong position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Saigon Viendong vs. HVC Investment and | Saigon Viendong vs. Transport and Industry | Saigon Viendong vs. Vietnam Technological And | Saigon Viendong vs. Binhthuan Agriculture Services |
| Dong A vs. Van Dien Fused | Dong A vs. Idico JSC | Dong A vs. Vietnam Medicinal Materials | Dong A vs. Hochiminh City Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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