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
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMC and Vinhomes is -0.35. 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 2.18 times more volatile than Vinhomes JSC. It trades about -0.17 of its total potential returns per unit of risk. Vinhomes JSC is currently generating about 0.31 per unit of volatility. If you would invest 4,035,000 in Vinhomes JSC on December 27, 2024 and sell it today you would earn a total of 1,115,000 from holding Vinhomes JSC or generate 27.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SMC Investment Trading vs. Vinhomes JSC
Performance |
Timeline |
SMC Investment Trading |
Vinhomes JSC |
SMC Investment and Vinhomes JSC Volatility Contrast
Predicted Return Density |
Returns |
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.SMC Investment vs. Bich Chi Food | SMC Investment vs. Binhthuan Agriculture Services | SMC Investment vs. Viettel Construction JSC | SMC Investment vs. Binh Duong Construction |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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