Correlation Between Saigon Telecommunicatio and Tien Giang

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

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

Diversification Opportunities for Saigon Telecommunicatio and Tien Giang

-0.42

Correlation Coefficient

Saigon Telecommunicatio  Tien Giang

Very good diversification

The 3 months correlation between Saigon and Tien is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Telecommunication Techn and Tien Giang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tien Giang Investment and Saigon Telecommunicatio 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 Saigon Telecommunication Technologies are associated (or correlated) with Tien Giang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tien Giang Investment has no effect on the direction of Saigon Telecommunicatio i.e., Saigon Telecommunicatio and Tien Giang go up and down completely randomly.

Pair Corralation between Saigon Telecommunicatio and Tien Giang

Assuming the 90 days trading horizon Saigon Telecommunication Technologies is expected to generate 2.18 times more return on investment than Tien Giang. However, Saigon Telecommunicatio is 2.18 times more volatile than Tien Giang Investment. It trades about 0.05 of its potential returns per unit of risk. Tien Giang Investment is currently generating about -0.04 per unit of risk. If you would invest  1,445,000  in Saigon Telecommunication Technologies on September 5, 2024 and sell it today you would earn a total of  50,000  from holding Saigon Telecommunication Technologies or generate 3.46% return on investment over 90 days.

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

Saigon Telecommunication Techn  vs.  Tien Giang Investment

Saigon Telecommunicatio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Telecommunication Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Saigon Telecommunicatio is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Tien Giang Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Saigon Telecommunicatio and Tien Giang

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

The idea behind Saigon Telecommunication Technologies and Tien Giang 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.