Correlation Between Tin Nghia and Saigon Telecommunicatio

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

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

Diversification Opportunities for Tin Nghia and Saigon Telecommunicatio

0.92

Correlation Coefficient

Tin Nghia  Saigon Telecommunicatio

Almost no diversification

The 3 months correlation between Tin and Saigon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tin Nghia Industrial and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Tin Nghia 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 Tin Nghia Industrial are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Tin Nghia i.e., Tin Nghia and Saigon Telecommunicatio go up and down completely randomly.

Pair Corralation between Tin Nghia and Saigon Telecommunicatio

Assuming the 90 days trading horizon Tin Nghia is expected to generate 5.53 times less return on investment than Saigon Telecommunicatio. But when comparing it to its historical volatility, Tin Nghia Industrial is 1.09 times less risky than Saigon Telecommunicatio. It trades about 0.01 of its potential returns per unit of risk. Saigon Telecommunication Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,545,000  in Saigon Telecommunication Technologies on March 1, 2025 and sell it today you would earn a total of  280,000  from holding Saigon Telecommunication Technologies or generate 18.12% return on investment over 90 days.

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

Tin Nghia Industrial  vs.  Saigon Telecommunication Techn

Tin Nghia Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tin Nghia Industrial 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 basic indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Saigon Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saigon Telecommunication Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Tin Nghia and Saigon Telecommunicatio

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

The idea behind Tin Nghia Industrial and Saigon Telecommunication Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.