Correlation Between Hanoi Beer and Japan Vietnam
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Japan Vietnam 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 Japan Vietnam 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 Japan Vietnam Medical, you can compare the effects of market volatilities on Hanoi Beer and Japan Vietnam 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 Japan Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Japan Vietnam.
Diversification Opportunities for Hanoi Beer and Japan Vietnam
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanoi and Japan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Japan Vietnam Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Vietnam Medical 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 Japan Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Vietnam Medical has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Japan Vietnam go up and down completely randomly.
Pair Corralation between Hanoi Beer and Japan Vietnam
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Japan Vietnam. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Beer Alcohol is 1.15 times less risky than Japan Vietnam. The stock trades about -0.18 of its potential returns per unit of risk. The Japan Vietnam Medical is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 384,000 in Japan Vietnam Medical on November 7, 2024 and sell it today you would earn a total of 32,000 from holding Japan Vietnam Medical or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 58.82% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Japan Vietnam Medical
Performance |
| Timeline |
| Hanoi Beer Alcohol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Japan Vietnam Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Hanoi Beer and Japan Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Japan Vietnam
The main advantage of trading using opposite Hanoi Beer and Japan Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Japan Vietnam 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 Japan Vietnam will offset losses from the drop in Japan Vietnam's long position.| Hanoi Beer vs. Damsan JSC | Hanoi Beer vs. Binhthuan Agriculture Services | Hanoi Beer vs. Bentre Aquaproduct Import |
| Japan Vietnam vs. Elcom Technology Communications | Japan Vietnam vs. Transport and Industry | Japan Vietnam vs. Innovative Technology Development | Japan Vietnam vs. Hai An Transport |
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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