Correlation Between VietinBank Securities and SMC Investment

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

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

Diversification Opportunities for VietinBank Securities and SMC Investment

-0.27

Correlation Coefficient

VietinBank Securities  SMC Investment

Very good diversification

The 3 months correlation between VietinBank and SMC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding VietinBank Securities JSC 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 VietinBank Securities 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 VietinBank Securities JSC 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 VietinBank Securities i.e., VietinBank Securities and SMC Investment go up and down completely randomly.

Pair Corralation between VietinBank Securities and SMC Investment

Assuming the 90 days trading horizon VietinBank Securities JSC is expected to generate 0.97 times more return on investment than SMC Investment. However, VietinBank Securities JSC is 1.03 times less risky than SMC Investment. It trades about 0.08 of its potential returns per unit of risk. SMC Investment Trading is currently generating about 0.0 per unit of risk. If you would invest  1,450,000  in VietinBank Securities JSC on October 5, 2024 and sell it today you would earn a total of  2,085,000  from holding VietinBank Securities JSC or generate 143.79% return on investment over 90 days.

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

VietinBank Securities JSC  vs.  SMC Investment Trading

VietinBank Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VietinBank Securities JSC 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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SMC Investment Trading

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SMC Investment Trading are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, SMC Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VietinBank Securities and SMC Investment

The main advantage of trading using opposite VietinBank Securities and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VietinBank Securities 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.

The idea behind VietinBank Securities JSC and SMC Investment Trading 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.