Correlation Between Saigon Beer and VINACONEX
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and VINACONEX 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 VINACONEX 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 VINACONEX 21, you can compare the effects of market volatilities on Saigon Beer and VINACONEX 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 VINACONEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and VINACONEX.
Diversification Opportunities for Saigon Beer and VINACONEX
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Saigon and VINACONEX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and VINACONEX 21 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINACONEX 21 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 VINACONEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINACONEX 21 has no effect on the direction of Saigon Beer i.e., Saigon Beer and VINACONEX go up and down completely randomly.
Pair Corralation between Saigon Beer and VINACONEX
Assuming the 90 days trading horizon Saigon Beer is expected to generate 15.81 times less return on investment than VINACONEX. But when comparing it to its historical volatility, Saigon Beer Alcohol is 4.36 times less risky than VINACONEX. It trades about 0.07 of its potential returns per unit of risk. VINACONEX 21 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 570,000 in VINACONEX 21 on September 5, 2024 and sell it today you would earn a total of 100,000 from holding VINACONEX 21 or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Saigon Beer Alcohol vs. VINACONEX 21
Performance |
| Timeline |
| Saigon Beer Alcohol |
| VINACONEX 21 |
Saigon Beer and VINACONEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and VINACONEX
The main advantage of trading using opposite Saigon Beer and VINACONEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, VINACONEX 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 VINACONEX will offset losses from the drop in VINACONEX'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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