Correlation Between Dinhvu Port and Saigon Telecommunicatio

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

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

Diversification Opportunities for Dinhvu Port and Saigon Telecommunicatio

0.35

Correlation Coefficient

Dinhvu Port  Saigon Telecommunicatio

Weak diversification

The 3 months correlation between Dinhvu and Saigon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dinhvu Port Investment and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Dinhvu Port 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 Dinhvu Port Investment 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 Dinhvu Port i.e., Dinhvu Port and Saigon Telecommunicatio go up and down completely randomly.

Pair Corralation between Dinhvu Port and Saigon Telecommunicatio

Assuming the 90 days trading horizon Dinhvu Port is expected to generate 1.13 times less return on investment than Saigon Telecommunicatio. But when comparing it to its historical volatility, Dinhvu Port Investment is 1.77 times less risky than Saigon Telecommunicatio. It trades about 0.07 of its potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,445,000  in Saigon Telecommunication Technologies on September 5, 2024 and sell it today you would earn a total of  50,000  from holding Saigon Telecommunication Technologies or generate 3.46% return on investment over 90 days.

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

Dinhvu Port Investment  vs.  Saigon Telecommunication Techn

Dinhvu Port Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dinhvu Port Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dinhvu Port 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 3 (%) 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 Dinhvu Port and Saigon Telecommunicatio

The main advantage of trading using opposite Dinhvu Port and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dinhvu Port 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 Dinhvu Port Investment 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.