Correlation Between Saigon Beer and Cotec Construction
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Cotec Construction 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 Cotec Construction 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 Cotec Construction JSC, you can compare the effects of market volatilities on Saigon Beer and Cotec Construction 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 Cotec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Cotec Construction.
Diversification Opportunities for Saigon Beer and Cotec Construction
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saigon and Cotec is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Cotec Construction JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cotec Construction JSC 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 Cotec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cotec Construction JSC has no effect on the direction of Saigon Beer i.e., Saigon Beer and Cotec Construction go up and down completely randomly.
Pair Corralation between Saigon Beer and Cotec Construction
Assuming the 90 days trading horizon Saigon Beer is expected to generate 11.52 times less return on investment than Cotec Construction. But when comparing it to its historical volatility, Saigon Beer Alcohol is 1.14 times less risky than Cotec Construction. It trades about 0.02 of its potential returns per unit of risk. Cotec Construction JSC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,492,370 in Cotec Construction JSC on October 26, 2024 and sell it today you would earn a total of 827,630 from holding Cotec Construction JSC or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saigon Beer Alcohol vs. Cotec Construction JSC
Performance |
| Timeline |
| Saigon Beer Alcohol |
| Cotec Construction JSC |
Saigon Beer and Cotec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and Cotec Construction
The main advantage of trading using opposite Saigon Beer and Cotec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Cotec Construction 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 Cotec Construction will offset losses from the drop in Cotec Construction's long position.| Saigon Beer vs. FIT INVEST JSC | Saigon Beer vs. Damsan JSC | Saigon Beer vs. An Phat Plastic | Saigon Beer vs. APG Securities Joint |
| Cotec Construction vs. FIT INVEST JSC | Cotec Construction vs. Damsan JSC | Cotec Construction vs. An Phat Plastic | Cotec Construction vs. APG Securities Joint |
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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