Correlation Between Vina2 Investment and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both Vina2 Investment and Saigon Machinery 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 Vina2 Investment and Saigon Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vina2 Investment and and Saigon Machinery Spare, you can compare the effects of market volatilities on Vina2 Investment and Saigon Machinery 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 Vina2 Investment with a short position of Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vina2 Investment and Saigon Machinery.
Diversification Opportunities for Vina2 Investment and Saigon Machinery
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vina2 and Saigon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vina2 Investment and and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare and Vina2 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 Vina2 Investment and are associated (or correlated) with Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of Vina2 Investment i.e., Vina2 Investment and Saigon Machinery go up and down completely randomly.
Pair Corralation between Vina2 Investment and Saigon Machinery
Assuming the 90 days trading horizon Vina2 Investment is expected to generate 3.87 times less return on investment than Saigon Machinery. But when comparing it to its historical volatility, Vina2 Investment and is 1.29 times less risky than Saigon Machinery. It trades about 0.03 of its potential returns per unit of risk. Saigon Machinery Spare is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 739,967 in Saigon Machinery Spare on October 16, 2024 and sell it today you would earn a total of 860,033 from holding Saigon Machinery Spare or generate 116.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.6% |
| Values | Daily Returns |
Vina2 Investment and vs. Saigon Machinery Spare
Performance |
| Timeline |
| Vina2 Investment |
| Saigon Machinery Spare |
Vina2 Investment and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vina2 Investment and Saigon Machinery
The main advantage of trading using opposite Vina2 Investment and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vina2 Investment position performs unexpectedly, Saigon Machinery 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 Machinery will offset losses from the drop in Saigon Machinery's long position.| Vina2 Investment vs. Song Hong Aluminum | Vina2 Investment vs. Hanoi Plastics JSC | Vina2 Investment vs. Transport and Industry | Vina2 Investment vs. Sao Vang Rubber |
| Saigon Machinery vs. Tien Giang Investment | Saigon Machinery vs. VTC Telecommunications JSC | Saigon Machinery vs. MST Investment JSC | Saigon Machinery vs. Din Capital 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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