Correlation Between Hanoi Beer and Saigon Beer
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Saigon Beer 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 Saigon Beer 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 Saigon Beer Alcohol, you can compare the effects of market volatilities on Hanoi Beer and Saigon Beer 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 Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Saigon Beer.
Diversification Opportunities for Hanoi Beer and Saigon Beer
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanoi and Saigon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Saigon Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Beer Alcohol 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 Saigon Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Beer Alcohol has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Saigon Beer go up and down completely randomly.
Pair Corralation between Hanoi Beer and Saigon Beer
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Saigon Beer. In addition to that, Hanoi Beer is 2.48 times more volatile than Saigon Beer Alcohol. It trades about -0.18 of its total potential returns per unit of risk. Saigon Beer Alcohol is currently generating about 0.03 per unit of volatility. If you would invest 5,360,000 in Saigon Beer Alcohol on November 5, 2024 and sell it today you would earn a total of 20,000 from holding Saigon Beer Alcohol or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 62.5% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Saigon Beer Alcohol
Performance |
| Timeline |
| Hanoi Beer Alcohol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saigon Beer Alcohol |
Hanoi Beer and Saigon Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Saigon Beer
The main advantage of trading using opposite Hanoi Beer and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Saigon Beer 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 Saigon Beer will offset losses from the drop in Saigon Beer's long position.| Hanoi Beer vs. Dong A Hotel | Hanoi Beer vs. Nafoods Group JSC | Hanoi Beer vs. FPT Digital Retail | Hanoi Beer vs. Saigon Beer Alcohol |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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