Correlation Between Hanoi Beer and Vu Dang
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Vu Dang 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 Vu Dang 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 Vu Dang Investment, you can compare the effects of market volatilities on Hanoi Beer and Vu Dang 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 Vu Dang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Vu Dang.
Diversification Opportunities for Hanoi Beer and Vu Dang
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanoi and SVD is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Vu Dang Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vu Dang Investment 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 Vu Dang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vu Dang Investment has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Vu Dang go up and down completely randomly.
Pair Corralation between Hanoi Beer and Vu Dang
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Vu Dang. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Beer Alcohol is 1.71 times less risky than Vu Dang. The stock trades about -0.01 of its potential returns per unit of risk. The Vu Dang Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 330,000 in Vu Dang Investment on August 31, 2024 and sell it today you would earn a total of 19,000 from holding Vu Dang Investment or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Vu Dang Investment
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Vu Dang Investment |
Hanoi Beer and Vu Dang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Vu Dang
The main advantage of trading using opposite Hanoi Beer and Vu Dang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Vu Dang 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 Vu Dang will offset losses from the drop in Vu Dang'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 |
| Vu Dang vs. Ben Thanh Rubber | Vu Dang vs. Vietnam JSCmmercial Bank | Vu Dang vs. Investment and Industrial | Vu Dang vs. Tienlen Steel Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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