Correlation Between Saigon Viendong and AgriBank Securities

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

By analyzing existing cross correlation between Saigon Viendong Technology and AgriBank Securities JSC, you can compare the effects of market volatilities on Saigon Viendong and AgriBank Securities 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 Viendong with a short position of AgriBank Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Viendong and AgriBank Securities.

Diversification Opportunities for Saigon Viendong and AgriBank Securities

-0.15

Correlation Coefficient

Saigon Viendong  AgriBank Securities

Good diversification

The 3 months correlation between Saigon and AgriBank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Viendong Technology and AgriBank Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriBank Securities JSC and Saigon Viendong 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 Viendong Technology are associated (or correlated) with AgriBank Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriBank Securities JSC has no effect on the direction of Saigon Viendong i.e., Saigon Viendong and AgriBank Securities go up and down completely randomly.

Pair Corralation between Saigon Viendong and AgriBank Securities

Assuming the 90 days trading horizon Saigon Viendong Technology is expected to under-perform the AgriBank Securities. In addition to that, Saigon Viendong is 1.4 times more volatile than AgriBank Securities JSC. It trades about -0.11 of its total potential returns per unit of risk. AgriBank Securities JSC is currently generating about -0.01 per unit of volatility. If you would invest  1,745,522  in AgriBank Securities JSC on September 4, 2024 and sell it today you would lose (40,522) from holding AgriBank Securities JSC or give up 2.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Saigon Viendong Technology  vs.  AgriBank Securities JSC

Saigon Viendong Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saigon Viendong Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

AgriBank Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Saigon Viendong and AgriBank Securities

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

The idea behind Saigon Viendong Technology and AgriBank Securities JSC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.