Correlation Between Hanoi Beer and Vinhomes JSC
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Vinhomes JSC 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 Vinhomes JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Beer Trading and Vinhomes JSC, you can compare the effects of market volatilities on Hanoi Beer and Vinhomes JSC 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 Vinhomes JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Vinhomes JSC.
Diversification Opportunities for Hanoi Beer and Vinhomes JSC
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanoi and Vinhomes is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Trading and Vinhomes JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinhomes JSC 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 Trading are associated (or correlated) with Vinhomes JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinhomes JSC has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Vinhomes JSC go up and down completely randomly.
Pair Corralation between Hanoi Beer and Vinhomes JSC
Assuming the 90 days trading horizon Hanoi Beer Trading is expected to generate 2.2 times more return on investment than Vinhomes JSC. However, Hanoi Beer is 2.2 times more volatile than Vinhomes JSC. It trades about 0.09 of its potential returns per unit of risk. Vinhomes JSC is currently generating about -0.01 per unit of risk. If you would invest 1,804,091 in Hanoi Beer Trading on September 14, 2024 and sell it today you would earn a total of 2,445,909 from holding Hanoi Beer Trading or generate 135.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.14% |
| Values | Daily Returns |
Hanoi Beer Trading vs. Vinhomes JSC
Performance |
| Timeline |
| Hanoi Beer Trading |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vinhomes JSC |
Hanoi Beer and Vinhomes JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Vinhomes JSC
The main advantage of trading using opposite Hanoi Beer and Vinhomes JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Vinhomes JSC 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 Vinhomes JSC will offset losses from the drop in Vinhomes JSC's long position.| Hanoi Beer vs. Hochiminh City Metal | Hanoi Beer vs. Nafoods Group JSC | Hanoi Beer vs. Fecon Mining JSC | Hanoi Beer vs. Post and Telecommunications |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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