Correlation Between Hanoi Beer and Binhthuan Agriculture
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Binhthuan Agriculture 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 Hanoi Beer and Binhthuan Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Beer Alcohol and Binhthuan Agriculture Services, you can compare the effects of market volatilities on Hanoi Beer and Binhthuan Agriculture 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 Hanoi Beer with a short position of Binhthuan Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Binhthuan Agriculture.
Diversification Opportunities for Hanoi Beer and Binhthuan Agriculture
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanoi and Binhthuan is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Binhthuan Agriculture Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binhthuan Agriculture and Hanoi Beer 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 Hanoi Beer Alcohol are associated (or correlated) with Binhthuan Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binhthuan Agriculture has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Binhthuan Agriculture go up and down completely randomly.
Pair Corralation between Hanoi Beer and Binhthuan Agriculture
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Binhthuan Agriculture. In addition to that, Hanoi Beer is 1.21 times more volatile than Binhthuan Agriculture Services. It trades about -0.11 of its total potential returns per unit of risk. Binhthuan Agriculture Services is currently generating about 0.16 per unit of volatility. 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 |
Hanoi Beer Alcohol vs. Binhthuan Agriculture Services
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Binhthuan Agriculture |
Hanoi Beer and Binhthuan Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Binhthuan Agriculture
The main advantage of trading using opposite Hanoi Beer and Binhthuan Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Binhthuan Agriculture 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 Binhthuan Agriculture will offset losses from the drop in Binhthuan Agriculture's long position.| Hanoi Beer vs. Vina2 Investment and | Hanoi Beer vs. Development Investment Construction | Hanoi Beer vs. Danang Education Investment | Hanoi Beer vs. Ha Noi Education |
| Binhthuan Agriculture vs. Ba Ria Thermal | Binhthuan Agriculture vs. Vietnam Dairy Products | Binhthuan Agriculture vs. Hochiminh City Metal | Binhthuan Agriculture vs. Investment and Industrial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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