Correlation Between Thu Duc and Saigon Viendong
Can any of the company-specific risk be diversified away by investing in both Thu Duc and Saigon Viendong 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 Thu Duc and Saigon Viendong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thu Duc TradingImport and Saigon Viendong Technology, you can compare the effects of market volatilities on Thu Duc and Saigon Viendong 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 Thu Duc with a short position of Saigon Viendong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thu Duc and Saigon Viendong.
Diversification Opportunities for Thu Duc and Saigon Viendong
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thu and Saigon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thu Duc TradingImport and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech and Thu Duc 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 Thu Duc TradingImport are associated (or correlated) with Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of Thu Duc i.e., Thu Duc and Saigon Viendong go up and down completely randomly.
Pair Corralation between Thu Duc and Saigon Viendong
Assuming the 90 days trading horizon Thu Duc TradingImport is expected to under-perform the Saigon Viendong. In addition to that, Thu Duc is 1.01 times more volatile than Saigon Viendong Technology. It trades about -0.35 of its total potential returns per unit of risk. Saigon Viendong Technology is currently generating about -0.07 per unit of volatility. If you would invest 1,235,000 in Saigon Viendong Technology on October 30, 2024 and sell it today you would lose (45,000) from holding Saigon Viendong Technology or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Thu Duc TradingImport vs. Saigon Viendong Technology
Performance |
| Timeline |
| Thu Duc TradingImport |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saigon Viendong Tech |
Thu Duc and Saigon Viendong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thu Duc and Saigon Viendong
The main advantage of trading using opposite Thu Duc and Saigon Viendong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thu Duc position performs unexpectedly, Saigon Viendong 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 Saigon Viendong will offset losses from the drop in Saigon Viendong's long position.| Thu Duc vs. Ba Ria Thermal | Thu Duc vs. CEO Group JSC | Thu Duc vs. Pha Le Plastics | Thu Duc vs. Tay Ninh Rubber |
| Saigon Viendong vs. Petrolimex Petrochemical JSC | Saigon Viendong vs. PostTelecommunication Equipment | Saigon Viendong vs. Transport and Industry | Saigon Viendong vs. Saigon Telecommunication Technologies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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