Correlation Between Saigon Telecommunicatio and Vietnam Rubber

Can any of the company-specific risk be diversified away by investing in both Saigon Telecommunicatio and Vietnam Rubber 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 Telecommunicatio and Vietnam Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saigon Telecommunication Technologies and Vietnam Rubber Group, you can compare the effects of market volatilities on Saigon Telecommunicatio and Vietnam Rubber 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 Telecommunicatio with a short position of Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Telecommunicatio and Vietnam Rubber.

Diversification Opportunities for Saigon Telecommunicatio and Vietnam Rubber

0.12

Correlation Coefficient

Saigon Telecommunicatio  Vietnam Rubber

Average diversification

The 3 months correlation between Saigon and Vietnam is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Telecommunication Techn and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group and Saigon Telecommunicatio 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 Telecommunication Technologies are associated (or correlated) with Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Saigon Telecommunicatio i.e., Saigon Telecommunicatio and Vietnam Rubber go up and down completely randomly.

Pair Corralation between Saigon Telecommunicatio and Vietnam Rubber

Assuming the 90 days trading horizon Saigon Telecommunication Technologies is expected to generate 0.83 times more return on investment than Vietnam Rubber. However, Saigon Telecommunication Technologies is 1.2 times less risky than Vietnam Rubber. It trades about 0.01 of its potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.11 per unit of risk. If you would invest  1,460,000  in Saigon Telecommunication Technologies on September 17, 2024 and sell it today you would earn a total of  10,000  from holding Saigon Telecommunication Technologies or generate 0.68% return on investment over 90 days.

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

Saigon Telecommunication Techn  vs.  Vietnam Rubber Group

Saigon Telecommunicatio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Saigon Telecommunicatio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vietnam Rubber Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vietnam Rubber Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Saigon Telecommunicatio and Vietnam Rubber

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

The idea behind Saigon Telecommunication Technologies and Vietnam Rubber Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.