Correlation Between Nafoods Group and Hanoi Beer
Can any of the company-specific risk be diversified away by investing in both Nafoods Group and Hanoi 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 Nafoods Group and Hanoi Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nafoods Group JSC and Hanoi Beer Trading, you can compare the effects of market volatilities on Nafoods Group and Hanoi 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 Nafoods Group with a short position of Hanoi Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nafoods Group and Hanoi Beer.
Diversification Opportunities for Nafoods Group and Hanoi Beer
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nafoods and Hanoi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nafoods Group JSC and Hanoi Beer Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Beer Trading and Nafoods Group 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 Nafoods Group JSC are associated (or correlated) with Hanoi Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Beer Trading has no effect on the direction of Nafoods Group i.e., Nafoods Group and Hanoi Beer go up and down completely randomly.
Pair Corralation between Nafoods Group and Hanoi Beer
Assuming the 90 days trading horizon Nafoods Group is expected to generate 1.67 times less return on investment than Hanoi Beer. But when comparing it to its historical volatility, Nafoods Group JSC is 2.06 times less risky than Hanoi Beer. It trades about 0.08 of its potential returns per unit of risk. Hanoi Beer Trading is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,262,952 in Hanoi Beer Trading on September 14, 2024 and sell it today you would earn a total of 987,048 from holding Hanoi Beer Trading or generate 30.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.19% |
| Values | Daily Returns |
Nafoods Group JSC vs. Hanoi Beer Trading
Performance |
| Timeline |
| Nafoods Group JSC |
| Hanoi Beer Trading |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nafoods Group and Hanoi Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nafoods Group and Hanoi Beer
The main advantage of trading using opposite Nafoods Group and Hanoi Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nafoods Group position performs unexpectedly, Hanoi 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 Hanoi Beer will offset losses from the drop in Hanoi Beer's long position.| Nafoods Group vs. Saigon Telecommunication Technologies | Nafoods Group vs. Elcom Technology Communications | Nafoods Group vs. VietinBank Securities JSC | Nafoods Group vs. VTC Telecommunications JSC |
| Hanoi Beer vs. Hochiminh City Metal | Hanoi Beer vs. Nafoods Group JSC | Hanoi Beer vs. Fecon Mining JSC | Hanoi Beer vs. Post and Telecommunications |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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