Correlation Between Saigon Beer and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Ben Thanh 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 Saigon Beer and Ben Thanh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saigon Beer Alcohol and Ben Thanh Rubber, you can compare the effects of market volatilities on Saigon Beer and Ben Thanh 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 Saigon Beer with a short position of Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Ben Thanh.
Diversification Opportunities for Saigon Beer and Ben Thanh
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saigon and Ben is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Ben Thanh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ben Thanh Rubber and Saigon 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 Saigon Beer Alcohol are associated (or correlated) with Ben Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ben Thanh Rubber has no effect on the direction of Saigon Beer i.e., Saigon Beer and Ben Thanh go up and down completely randomly.
Pair Corralation between Saigon Beer and Ben Thanh
Assuming the 90 days trading horizon Saigon Beer is expected to generate 11.72 times less return on investment than Ben Thanh. But when comparing it to its historical volatility, Saigon Beer Alcohol is 1.23 times less risky than Ben Thanh. It trades about 0.03 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,305,000 in Ben Thanh Rubber on August 31, 2024 and sell it today you would earn a total of 95,000 from holding Ben Thanh Rubber or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saigon Beer Alcohol vs. Ben Thanh Rubber
Performance |
| Timeline |
| Saigon Beer Alcohol |
| Ben Thanh Rubber |
Saigon Beer and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and Ben Thanh
The main advantage of trading using opposite Saigon Beer and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Ben Thanh 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 Ben Thanh will offset losses from the drop in Ben Thanh's long position.| Saigon Beer vs. FIT INVEST JSC | Saigon Beer vs. Damsan JSC | Saigon Beer vs. An Phat Plastic | Saigon Beer vs. Alphanam ME |
| Ben Thanh vs. FIT INVEST JSC | Ben Thanh vs. Damsan JSC | Ben Thanh vs. An Phat Plastic | Ben Thanh vs. Alphanam ME |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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