Correlation Between Asia Commercial and Saigon Beer
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and Saigon 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 Asia Commercial and Saigon Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Commercial Bank and Saigon Beer Alcohol, you can compare the effects of market volatilities on Asia Commercial and Saigon 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 Asia Commercial with a short position of Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and Saigon Beer.
Diversification Opportunities for Asia Commercial and Saigon Beer
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asia and Saigon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and Saigon Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Beer Alcohol and Asia Commercial 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 Asia Commercial Bank are associated (or correlated) with Saigon Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Beer Alcohol has no effect on the direction of Asia Commercial i.e., Asia Commercial and Saigon Beer go up and down completely randomly.
Pair Corralation between Asia Commercial and Saigon Beer
Assuming the 90 days trading horizon Asia Commercial is expected to generate 1.26 times less return on investment than Saigon Beer. But when comparing it to its historical volatility, Asia Commercial Bank is 1.23 times less risky than Saigon Beer. It trades about 0.07 of its potential returns per unit of risk. Saigon Beer Alcohol is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,550,000 in Saigon Beer Alcohol on September 5, 2024 and sell it today you would earn a total of 70,000 from holding Saigon Beer Alcohol or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Commercial Bank vs. Saigon Beer Alcohol
Performance |
| Timeline |
| Asia Commercial Bank |
| Saigon Beer Alcohol |
Asia Commercial and Saigon Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and Saigon Beer
The main advantage of trading using opposite Asia Commercial and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, Saigon 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 Saigon Beer will offset losses from the drop in Saigon Beer's long position.| Asia Commercial vs. Sao Ta Foods | Asia Commercial vs. Binh Duong Trade | Asia Commercial vs. Investment and Industrial | Asia Commercial vs. Saigon Beer Alcohol |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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