Correlation Between Din Capital and Sao Vang

Can any of the company-specific risk be diversified away by investing in both Din Capital and Sao Vang 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 Din Capital and Sao Vang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Din Capital Investment and Sao Vang Rubber, you can compare the effects of market volatilities on Din Capital and Sao Vang 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 Din Capital with a short position of Sao Vang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Sao Vang.

Diversification Opportunities for Din Capital and Sao Vang

-0.86

Correlation Coefficient

Din Capital  Sao Vang

Pay attention - limited upside

The 3 months correlation between Din and Sao is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Sao Vang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Vang Rubber and Din Capital 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 Din Capital Investment are associated (or correlated) with Sao Vang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Vang Rubber has no effect on the direction of Din Capital i.e., Din Capital and Sao Vang go up and down completely randomly.

Pair Corralation between Din Capital and Sao Vang

Assuming the 90 days trading horizon Din Capital is expected to generate 3.17 times less return on investment than Sao Vang. But when comparing it to its historical volatility, Din Capital Investment is 1.48 times less risky than Sao Vang. It trades about 0.02 of its potential returns per unit of risk. Sao Vang Rubber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,900,407  in Sao Vang Rubber on October 3, 2024 and sell it today you would earn a total of  549,593  from holding Sao Vang Rubber or generate 28.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	80.52%
Values	Daily Returns

Din Capital Investment  vs.  Sao Vang Rubber

Din Capital Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Sao Vang Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sao Vang Rubber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Din Capital and Sao Vang

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

The idea behind Din Capital Investment and Sao Vang Rubber 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..