Correlation Between SSIAM VNFIN and Danang Education

Can any of the company-specific risk be diversified away by investing in both SSIAM VNFIN and Danang Education 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 SSIAM VNFIN and Danang Education into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SSIAM VNFIN LEAD and Danang Education Investment, you can compare the effects of market volatilities on SSIAM VNFIN and Danang Education 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 SSIAM VNFIN with a short position of Danang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSIAM VNFIN and Danang Education.

Diversification Opportunities for SSIAM VNFIN and Danang Education

-0.27

Correlation Coefficient

SSIAM VNFIN  Danang Education

Very good diversification

The 3 months correlation between SSIAM and Danang is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SSIAM VNFIN LEAD and Danang Education Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Education Inv and SSIAM VNFIN 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 SSIAM VNFIN LEAD are associated (or correlated) with Danang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Education Inv has no effect on the direction of SSIAM VNFIN i.e., SSIAM VNFIN and Danang Education go up and down completely randomly.

Pair Corralation between SSIAM VNFIN and Danang Education

Assuming the 90 days trading horizon SSIAM VNFIN LEAD is expected to generate 0.39 times more return on investment than Danang Education. However, SSIAM VNFIN LEAD is 2.57 times less risky than Danang Education. It trades about 0.15 of its potential returns per unit of risk. Danang Education Investment is currently generating about -0.01 per unit of risk. If you would invest  2,210,000  in SSIAM VNFIN LEAD on December 31, 2024 and sell it today you would earn a total of  200,000  from holding SSIAM VNFIN LEAD or generate 9.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.88%
Values	Daily Returns

SSIAM VNFIN LEAD  vs.  Danang Education Investment

SSIAM VNFIN LEAD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSIAM VNFIN LEAD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SSIAM VNFIN may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Danang Education Inv

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SSIAM VNFIN and Danang Education

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

The idea behind SSIAM VNFIN LEAD and Danang Education Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.