Correlation Between SMC Investment and Vina2 Investment

Can any of the company-specific risk be diversified away by investing in both SMC Investment and Vina2 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 SMC Investment and Vina2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SMC Investment Trading and Vina2 Investment and, you can compare the effects of market volatilities on SMC Investment and Vina2 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 SMC Investment with a short position of Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and Vina2 Investment.

Diversification Opportunities for SMC Investment and Vina2 Investment

0.57

Correlation Coefficient

SMC Investment  Vina2 Investment

Very weak diversification

The 3 months correlation between SMC and Vina2 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment and SMC 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 SMC Investment Trading are associated (or correlated) with Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of SMC Investment i.e., SMC Investment and Vina2 Investment go up and down completely randomly.

Pair Corralation between SMC Investment and Vina2 Investment

Assuming the 90 days trading horizon SMC Investment Trading is expected to under-perform the Vina2 Investment. In addition to that, SMC Investment is 1.08 times more volatile than Vina2 Investment and. It trades about -0.03 of its total potential returns per unit of risk. Vina2 Investment and is currently generating about -0.02 per unit of volatility. If you would invest  1,300,000  in Vina2 Investment and on October 15, 2024 and sell it today you would lose (380,000) from holding Vina2 Investment and or give up 29.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.71%
Values	Daily Returns

SMC Investment Trading  vs.  Vina2 Investment and

SMC Investment Trading

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SMC Investment Trading are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, SMC Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vina2 Investment

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vina2 Investment and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vina2 Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SMC Investment and Vina2 Investment

The main advantage of trading using opposite SMC Investment and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Investment position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.

The idea behind SMC Investment Trading and Vina2 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.