Correlation Between SSIAM VNFIN and Tng Investment

Can any of the company-specific risk be diversified away by investing in both SSIAM VNFIN and Tng 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 SSIAM VNFIN and Tng Investment 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 Tng Investment And, you can compare the effects of market volatilities on SSIAM VNFIN and Tng 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 SSIAM VNFIN with a short position of Tng Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSIAM VNFIN and Tng Investment.

Diversification Opportunities for SSIAM VNFIN and Tng Investment

-0.36

Correlation Coefficient

SSIAM VNFIN  Tng Investment

Very good diversification

The 3 months correlation between SSIAM and Tng is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SSIAM VNFIN LEAD and Tng Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tng Investment And 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 Tng Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tng Investment And has no effect on the direction of SSIAM VNFIN i.e., SSIAM VNFIN and Tng Investment go up and down completely randomly.

Pair Corralation between SSIAM VNFIN and Tng Investment

Assuming the 90 days trading horizon SSIAM VNFIN LEAD is expected to generate 0.65 times more return on investment than Tng Investment. However, SSIAM VNFIN LEAD is 1.54 times less risky than Tng Investment. It trades about 0.08 of its potential returns per unit of risk. Tng Investment And is currently generating about -0.01 per unit of risk. If you would invest  2,042,000  in SSIAM VNFIN LEAD on September 12, 2024 and sell it today you would earn a total of  103,000  from holding SSIAM VNFIN LEAD or generate 5.04% return on investment over 90 days.

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

SSIAM VNFIN LEAD  vs.  Tng Investment And

SSIAM VNFIN LEAD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSIAM VNFIN LEAD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SSIAM VNFIN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Tng Investment And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tng Investment And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Tng Investment 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 Tng Investment

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

The idea behind SSIAM VNFIN LEAD and Tng Investment And 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.