Correlation Between Saigon Beer and SMC Investment
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and SMC Investment 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 Beer and SMC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Beer Alcohol and SMC Investment Trading, you can compare the effects of market volatilities on Saigon Beer and SMC Investment 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 Beer with a short position of SMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and SMC Investment.
Diversification Opportunities for Saigon Beer and SMC Investment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saigon and SMC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and SMC Investment Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Investment Trading and Saigon Beer 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 Beer Alcohol are associated (or correlated) with SMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Investment Trading has no effect on the direction of Saigon Beer i.e., Saigon Beer and SMC Investment go up and down completely randomly.
Pair Corralation between Saigon Beer and SMC Investment
Assuming the 90 days trading horizon Saigon Beer is expected to generate 49.58 times less return on investment than SMC Investment. But when comparing it to its historical volatility, Saigon Beer Alcohol is 4.29 times less risky than SMC Investment. It trades about 0.0 of its potential returns per unit of risk. SMC Investment Trading is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 794,000 in SMC Investment Trading on October 1, 2024 and sell it today you would earn a total of 66,000 from holding SMC Investment Trading or generate 8.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Saigon Beer Alcohol vs. SMC Investment Trading
Performance |
Timeline |
Saigon Beer Alcohol |
SMC Investment Trading |
Saigon Beer and SMC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saigon Beer and SMC Investment
The main advantage of trading using opposite Saigon Beer and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, SMC Investment 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 SMC Investment will offset losses from the drop in SMC Investment's long position.Saigon Beer vs. TDT Investment and | Saigon Beer vs. Long Giang Investment | Saigon Beer vs. Vietnam Petroleum Transport | Saigon Beer vs. Thanh Dat Investment |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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