Correlation Between LDG Investment and Saigon Viendong

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

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

Diversification Opportunities for LDG Investment and Saigon Viendong

0.04

Correlation Coefficient

LDG Investment  Saigon Viendong

Significant diversification

The 3 months correlation between LDG and Saigon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Saigon Viendong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Viendong Tech and LDG Investment 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 LDG Investment JSC are associated (or correlated) with Saigon Viendong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Viendong Tech has no effect on the direction of LDG Investment i.e., LDG Investment and Saigon Viendong go up and down completely randomly.

Pair Corralation between LDG Investment and Saigon Viendong

Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Saigon Viendong. In addition to that, LDG Investment is 1.17 times more volatile than Saigon Viendong Technology. It trades about -0.06 of its total potential returns per unit of risk. Saigon Viendong Technology is currently generating about 0.05 per unit of volatility. If you would invest  996,923  in Saigon Viendong Technology on October 14, 2024 and sell it today you would earn a total of  143,077  from holding Saigon Viendong Technology or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.65%
Values	Daily Returns

LDG Investment JSC  vs.  Saigon Viendong Technology

LDG Investment JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Saigon Viendong Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Viendong Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Saigon Viendong is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with LDG Investment and Saigon Viendong

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

The idea behind LDG Investment JSC and Saigon Viendong Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.