Correlation Between SMC Investment and Vinhomes JSC

Can any of the company-specific risk be diversified away by investing in both SMC Investment and Vinhomes JSC 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 Vinhomes JSC 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 Vinhomes JSC, you can compare the effects of market volatilities on SMC Investment and Vinhomes JSC 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 Vinhomes JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and Vinhomes JSC.

Diversification Opportunities for SMC Investment and Vinhomes JSC

0.09

Correlation Coefficient

SMC Investment  Vinhomes JSC

Significant diversification

The 3 months correlation between SMC and Vinhomes is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and Vinhomes JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinhomes JSC 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 Vinhomes JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinhomes JSC has no effect on the direction of SMC Investment i.e., SMC Investment and Vinhomes JSC go up and down completely randomly.

Pair Corralation between SMC Investment and Vinhomes JSC

Assuming the 90 days trading horizon SMC Investment Trading is expected to under-perform the Vinhomes JSC. In addition to that, SMC Investment is 1.97 times more volatile than Vinhomes JSC. It trades about -0.11 of its total potential returns per unit of risk. Vinhomes JSC is currently generating about 0.03 per unit of volatility. If you would invest  4,300,000  in Vinhomes JSC on December 10, 2024 and sell it today you would earn a total of  230,000  from holding Vinhomes JSC or generate 5.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SMC Investment Trading  vs.  Vinhomes JSC

SMC Investment Trading

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMC Investment Trading 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Vinhomes JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vinhomes JSC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Vinhomes JSC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SMC Investment and Vinhomes JSC

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

The idea behind SMC Investment Trading and Vinhomes JSC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.