Correlation Between Hanoi Beer and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Ben Thanh 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 Ben Thanh 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 Ben Thanh Rubber, you can compare the effects of market volatilities on Hanoi Beer and Ben Thanh 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 Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Ben Thanh.
Diversification Opportunities for Hanoi Beer and Ben Thanh
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanoi and Ben is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Ben Thanh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ben Thanh Rubber 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 Ben Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ben Thanh Rubber has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Ben Thanh go up and down completely randomly.
Pair Corralation between Hanoi Beer and Ben Thanh
Assuming the 90 days trading horizon Hanoi Beer is expected to generate 5.36 times less return on investment than Ben Thanh. But when comparing it to its historical volatility, Hanoi Beer Alcohol is 1.24 times less risky than Ben Thanh. It trades about 0.02 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,087,286 in Ben Thanh Rubber on August 31, 2024 and sell it today you would earn a total of 312,714 from holding Ben Thanh Rubber or generate 28.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.36% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Ben Thanh Rubber
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Ben Thanh Rubber |
Hanoi Beer and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Ben Thanh
The main advantage of trading using opposite Hanoi Beer and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Ben Thanh 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 Ben Thanh will offset losses from the drop in Ben Thanh's long position.| Hanoi Beer vs. Ben Thanh Rubber | Hanoi Beer vs. SCG Construction JSC | Hanoi Beer vs. Mechanics Construction and | Hanoi Beer vs. Cotec Construction JSC |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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