Correlation Between Saigon Beer and Tay Ninh
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Tay Ninh 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 Tay Ninh 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 Tay Ninh Rubber, you can compare the effects of market volatilities on Saigon Beer and Tay Ninh 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 Tay Ninh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Tay Ninh.
Diversification Opportunities for Saigon Beer and Tay Ninh
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saigon and Tay is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Tay Ninh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tay Ninh 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 Tay Ninh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tay Ninh Rubber has no effect on the direction of Saigon Beer i.e., Saigon Beer and Tay Ninh go up and down completely randomly.
Pair Corralation between Saigon Beer and Tay Ninh
Assuming the 90 days trading horizon Saigon Beer is expected to generate 30.75 times less return on investment than Tay Ninh. But when comparing it to its historical volatility, Saigon Beer Alcohol is 3.0 times less risky than Tay Ninh. It trades about 0.03 of its potential returns per unit of risk. Tay Ninh Rubber is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,090,000 in Tay Ninh Rubber on August 31, 2024 and sell it today you would earn a total of 810,000 from holding Tay Ninh Rubber or generate 19.8% 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. Tay Ninh Rubber
Performance |
| Timeline |
| Saigon Beer Alcohol |
| Tay Ninh Rubber |
Saigon Beer and Tay Ninh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and Tay Ninh
The main advantage of trading using opposite Saigon Beer and Tay Ninh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Tay Ninh 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 Tay Ninh will offset losses from the drop in Tay Ninh'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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