Correlation Between Long An and Sao Ta
Can any of the company-specific risk be diversified away by investing in both Long An and Sao Ta 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 Long An and Sao Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long An Food and Sao Ta Foods, you can compare the effects of market volatilities on Long An and Sao Ta 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 Long An with a short position of Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long An and Sao Ta.
Diversification Opportunities for Long An and Sao Ta
Average diversification
The 3 months correlation between Long and Sao is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Long An Food and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods and Long An 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 Long An Food are associated (or correlated) with Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of Long An i.e., Long An and Sao Ta go up and down completely randomly.
Pair Corralation between Long An and Sao Ta
Assuming the 90 days trading horizon Long An Food is expected to generate 2.49 times more return on investment than Sao Ta. However, Long An is 2.49 times more volatile than Sao Ta Foods. It trades about 0.26 of its potential returns per unit of risk. Sao Ta Foods is currently generating about 0.29 per unit of risk. If you would invest 1,825,000 in Long An Food on December 11, 2024 and sell it today you would earn a total of 390,000 from holding Long An Food or generate 21.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 97.3% |
Values | Daily Returns |
Long An Food vs. Sao Ta Foods
Performance |
Timeline |
Long An Food |
Sao Ta Foods |
Long An and Sao Ta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Long An and Sao Ta
The main advantage of trading using opposite Long An and Sao Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long An position performs unexpectedly, Sao Ta 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 Sao Ta will offset losses from the drop in Sao Ta's long position.Long An vs. Saigon Telecommunication Technologies | Long An vs. Song Hong Aluminum | Long An vs. Nafoods Group JSC | Long An vs. Sao Ta Foods |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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