Correlation Between Binhthuan Agriculture and Hanoi Beer
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and Hanoi Beer 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 Binhthuan Agriculture and Hanoi Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binhthuan Agriculture Services and Hanoi Beer Alcohol, you can compare the effects of market volatilities on Binhthuan Agriculture and Hanoi Beer 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 Binhthuan Agriculture with a short position of Hanoi Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and Hanoi Beer.
Diversification Opportunities for Binhthuan Agriculture and Hanoi Beer
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binhthuan and Hanoi is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and Hanoi Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Beer Alcohol and Binhthuan Agriculture 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 Binhthuan Agriculture Services are associated (or correlated) with Hanoi Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Beer Alcohol has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and Hanoi Beer go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and Hanoi Beer
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to generate 0.83 times more return on investment than Hanoi Beer. However, Binhthuan Agriculture Services is 1.21 times less risky than Hanoi Beer. It trades about 0.16 of its potential returns per unit of risk. Hanoi Beer Alcohol is currently generating about -0.11 per unit of risk. If you would invest 380,000 in Binhthuan Agriculture Services on September 2, 2024 and sell it today you would earn a total of 13,000 from holding Binhthuan Agriculture Services or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. Hanoi Beer Alcohol
Performance |
| Timeline |
| Binhthuan Agriculture |
| Hanoi Beer Alcohol |
Binhthuan Agriculture and Hanoi Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and Hanoi Beer
The main advantage of trading using opposite Binhthuan Agriculture and Hanoi Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, Hanoi Beer 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 Hanoi Beer will offset losses from the drop in Hanoi Beer's long position.| Binhthuan Agriculture vs. Ba Ria Thermal | Binhthuan Agriculture vs. Vietnam Dairy Products | Binhthuan Agriculture vs. Hochiminh City Metal | Binhthuan Agriculture vs. Investment and Industrial |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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