Correlation Between Saigon Viendong and Hanoi Plastics
Can any of the company-specific risk be diversified away by investing in both Saigon Viendong and Hanoi Plastics 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 Hanoi Plastics 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 Hanoi Plastics JSC, you can compare the effects of market volatilities on Saigon Viendong and Hanoi Plastics 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 Hanoi Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Viendong and Hanoi Plastics.
Diversification Opportunities for Saigon Viendong and Hanoi Plastics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and Hanoi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Viendong Technology and Hanoi Plastics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Plastics JSC 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 Hanoi Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Plastics JSC has no effect on the direction of Saigon Viendong i.e., Saigon Viendong and Hanoi Plastics go up and down completely randomly.
Pair Corralation between Saigon Viendong and Hanoi Plastics
Assuming the 90 days trading horizon Saigon Viendong Technology is expected to generate 3.53 times more return on investment than Hanoi Plastics. However, Saigon Viendong is 3.53 times more volatile than Hanoi Plastics JSC. It trades about -0.01 of its potential returns per unit of risk. Hanoi Plastics JSC is currently generating about -0.21 per unit of risk. If you would invest 1,155,000 in Saigon Viendong Technology on October 12, 2024 and sell it today you would lose (15,000) from holding Saigon Viendong Technology or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Saigon Viendong Technology vs. Hanoi Plastics JSC
Performance |
| Timeline |
| Saigon Viendong Tech |
| Hanoi Plastics JSC |
Saigon Viendong and Hanoi Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Viendong and Hanoi Plastics
The main advantage of trading using opposite Saigon Viendong and Hanoi Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Viendong position performs unexpectedly, Hanoi Plastics 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 Hanoi Plastics will offset losses from the drop in Hanoi Plastics' long position.| Saigon Viendong vs. 1369 Construction JSC | Saigon Viendong vs. Thanh Dat Investment | Saigon Viendong vs. Petrolimex International Trading | Saigon Viendong vs. SCG Construction JSC |
| Hanoi Plastics vs. IDJ FINANCIAL | Hanoi Plastics vs. SMC Investment Trading | Hanoi Plastics vs. Saigon Viendong Technology | Hanoi Plastics vs. Long Giang 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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