Correlation Between Hanoi Beer and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Tienlen Steel 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 Tienlen Steel 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 Tienlen Steel Corp, you can compare the effects of market volatilities on Hanoi Beer and Tienlen Steel 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 Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Tienlen Steel.
Diversification Opportunities for Hanoi Beer and Tienlen Steel
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanoi and Tienlen is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp 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 Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Tienlen Steel go up and down completely randomly.
Pair Corralation between Hanoi Beer and Tienlen Steel
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to generate 0.93 times more return on investment than Tienlen Steel. However, Hanoi Beer Alcohol is 1.07 times less risky than Tienlen Steel. It trades about -0.01 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.46 per unit of risk. If you would invest 3,900,000 in Hanoi Beer Alcohol on August 31, 2024 and sell it today you would lose (20,000) from holding Hanoi Beer Alcohol or give up 0.51% 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. Tienlen Steel Corp
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Tienlen Steel Corp |
Hanoi Beer and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Tienlen Steel
The main advantage of trading using opposite Hanoi Beer and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel'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 |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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