Correlation Between Tri Viet and SSI Securities

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

By analyzing existing cross correlation between Tri Viet Management and SSI Securities Corp, you can compare the effects of market volatilities on Tri Viet and SSI Securities 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 Tri Viet with a short position of SSI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Viet and SSI Securities.

Diversification Opportunities for Tri Viet and SSI Securities

-0.01

Correlation Coefficient

Tri Viet  SSI Securities

Good diversification

The 3 months correlation between Tri and SSI is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tri Viet Management and SSI Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSI Securities Corp and Tri Viet 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 Tri Viet Management are associated (or correlated) with SSI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSI Securities Corp has no effect on the direction of Tri Viet i.e., Tri Viet and SSI Securities go up and down completely randomly.

Pair Corralation between Tri Viet and SSI Securities

Assuming the 90 days trading horizon Tri Viet Management is expected to generate 1.3 times more return on investment than SSI Securities. However, Tri Viet is 1.3 times more volatile than SSI Securities Corp. It trades about 0.1 of its potential returns per unit of risk. SSI Securities Corp is currently generating about -0.03 per unit of risk. If you would invest  570,000  in Tri Viet Management on October 5, 2024 and sell it today you would earn a total of  470,000  from holding Tri Viet Management or generate 82.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.99%
Values	Daily Returns

Tri Viet Management  vs.  SSI Securities Corp

Tri Viet Management

Risk-Adjusted Performance

3 of 100

Insignificant

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

SSI Securities Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Tri Viet and SSI Securities

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

The idea behind Tri Viet Management and SSI Securities Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.