Correlation Between Hanoi Beer and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on Hanoi Beer and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Ducgiang Chemicals.
Diversification Opportunities for Hanoi Beer and Ducgiang Chemicals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanoi and Ducgiang is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang Chemicals 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between Hanoi Beer and Ducgiang Chemicals
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Ducgiang Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Beer Alcohol is 1.4 times less risky than Ducgiang Chemicals. The stock trades about -0.11 of its potential returns per unit of risk. The Ducgiang Chemicals Detergent is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 11,140,000 in Ducgiang Chemicals Detergent on September 2, 2024 and sell it today you would lose (190,000) from holding Ducgiang Chemicals Detergent or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Ducgiang Chemicals |
Hanoi Beer and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Ducgiang Chemicals
The main advantage of trading using opposite Hanoi Beer and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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