Correlation Between SSIAM VNFIN and Hochiminh City

Can any of the company-specific risk be diversified away by investing in both SSIAM VNFIN and Hochiminh City 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 SSIAM VNFIN and Hochiminh City into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SSIAM VNFIN LEAD and Hochiminh City Metal, you can compare the effects of market volatilities on SSIAM VNFIN and Hochiminh City 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 SSIAM VNFIN with a short position of Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSIAM VNFIN and Hochiminh City.

Diversification Opportunities for SSIAM VNFIN and Hochiminh City

-0.03

Correlation Coefficient

SSIAM VNFIN  Hochiminh City

Good diversification

The 3 months correlation between SSIAM and Hochiminh is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SSIAM VNFIN LEAD and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal and SSIAM VNFIN 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 SSIAM VNFIN LEAD are associated (or correlated) with Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of SSIAM VNFIN i.e., SSIAM VNFIN and Hochiminh City go up and down completely randomly.

Pair Corralation between SSIAM VNFIN and Hochiminh City

Assuming the 90 days trading horizon SSIAM VNFIN LEAD is expected to generate 0.64 times more return on investment than Hochiminh City. However, SSIAM VNFIN LEAD is 1.57 times less risky than Hochiminh City. It trades about 0.03 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.03 per unit of risk. If you would invest  2,063,000  in SSIAM VNFIN LEAD on September 3, 2024 and sell it today you would earn a total of  37,000  from holding SSIAM VNFIN LEAD or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SSIAM VNFIN LEAD  vs.  Hochiminh City Metal

SSIAM VNFIN LEAD

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SSIAM VNFIN LEAD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SSIAM VNFIN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hochiminh City Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hochiminh City Metal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Hochiminh City is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SSIAM VNFIN and Hochiminh City

The main advantage of trading using opposite SSIAM VNFIN and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSIAM VNFIN position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City's long position.

The idea behind SSIAM VNFIN LEAD and Hochiminh City Metal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.