Correlation Between Saigon Beer and Vietnam Dairy
Can any of the company-specific risk be diversified away by investing in both Saigon Beer and Vietnam Dairy 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 Vietnam Dairy 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 Vietnam Dairy Products, you can compare the effects of market volatilities on Saigon Beer and Vietnam Dairy 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 Vietnam Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saigon Beer and Vietnam Dairy.
Diversification Opportunities for Saigon Beer and Vietnam Dairy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saigon and Vietnam is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Vietnam Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Dairy Products 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 Vietnam Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Dairy Products has no effect on the direction of Saigon Beer i.e., Saigon Beer and Vietnam Dairy go up and down completely randomly.
Pair Corralation between Saigon Beer and Vietnam Dairy
Assuming the 90 days trading horizon Saigon Beer Alcohol is expected to under-perform the Vietnam Dairy. In addition to that, Saigon Beer is 3.64 times more volatile than Vietnam Dairy Products. It trades about -0.06 of its total potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.02 per unit of volatility. If you would invest 7,506,820 in Vietnam Dairy Products on August 30, 2024 and sell it today you would lose (1,026,820) from holding Vietnam Dairy Products or give up 13.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saigon Beer Alcohol vs. Vietnam Dairy Products
Performance |
| Timeline |
| Saigon Beer Alcohol |
| Vietnam Dairy Products |
Saigon Beer and Vietnam Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saigon Beer and Vietnam Dairy
The main advantage of trading using opposite Saigon Beer and Vietnam Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saigon Beer position performs unexpectedly, Vietnam Dairy 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 Vietnam Dairy will offset losses from the drop in Vietnam Dairy'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 |
| Vietnam Dairy vs. FIT INVEST JSC | Vietnam Dairy vs. Damsan JSC | Vietnam Dairy vs. An Phat Plastic | Vietnam Dairy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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