Correlation Between Hanoi Beer and Cotec Construction
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Cotec Construction 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 Cotec Construction 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 Cotec Construction JSC, you can compare the effects of market volatilities on Hanoi Beer and Cotec Construction 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 Cotec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Cotec Construction.
Diversification Opportunities for Hanoi Beer and Cotec Construction
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanoi and Cotec is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Cotec Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cotec Construction JSC 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 Cotec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cotec Construction JSC has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Cotec Construction go up and down completely randomly.
Pair Corralation between Hanoi Beer and Cotec Construction
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to generate 0.71 times more return on investment than Cotec Construction. However, Hanoi Beer Alcohol is 1.41 times less risky than Cotec Construction. It trades about -0.11 of its potential returns per unit of risk. Cotec Construction JSC is currently generating about -0.08 per unit of risk. If you would invest 3,950,000 in Hanoi Beer Alcohol on September 2, 2024 and sell it today you would lose (100,000) from holding Hanoi Beer Alcohol or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Cotec Construction JSC
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Cotec Construction JSC |
Hanoi Beer and Cotec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Cotec Construction
The main advantage of trading using opposite Hanoi Beer and Cotec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Cotec Construction 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 Cotec Construction will offset losses from the drop in Cotec Construction'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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