Correlation Between Transimex Transportation and Saigon Telecommunicatio

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

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

Diversification Opportunities for Transimex Transportation and Saigon Telecommunicatio

-0.15

Correlation Coefficient

Transimex Transportation  Saigon Telecommunicatio

Good diversification

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

Pair Corralation between Transimex Transportation and Saigon Telecommunicatio

Assuming the 90 days trading horizon Transimex Transportation JSC is expected to under-perform the Saigon Telecommunicatio. In addition to that, Transimex Transportation is 2.14 times more volatile than Saigon Telecommunication Technologies. It trades about -0.03 of its total potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.01 per unit of volatility. If you would invest  1,460,000  in Saigon Telecommunication Technologies on September 14, 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 Against
Strength	Insignificant
Accuracy	63.08%
Values	Daily Returns

Transimex Transportation JSC  vs.  Saigon Telecommunication Techn

Transimex Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Transimex Transportation and Saigon Telecommunicatio

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

The idea behind Transimex Transportation JSC and Saigon Telecommunication Technologies 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.