Correlation Between Tien Giang and Saigon Beer
Can any of the company-specific risk be diversified away by investing in both Tien Giang and Saigon Beer 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 Tien Giang and Saigon Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and Saigon Beer Alcohol, you can compare the effects of market volatilities on Tien Giang and Saigon Beer 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 Tien Giang with a short position of Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and Saigon Beer.
Diversification Opportunities for Tien Giang and Saigon Beer
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tien and Saigon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment and Saigon Beer Alcohol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Beer Alcohol and Tien Giang 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 Tien Giang Investment are associated (or correlated) with Saigon Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Beer Alcohol has no effect on the direction of Tien Giang i.e., Tien Giang and Saigon Beer go up and down completely randomly.
Pair Corralation between Tien Giang and Saigon Beer
Assuming the 90 days trading horizon Tien Giang Investment is expected to generate 2.34 times more return on investment than Saigon Beer. However, Tien Giang is 2.34 times more volatile than Saigon Beer Alcohol. It trades about 0.31 of its potential returns per unit of risk. Saigon Beer Alcohol is currently generating about 0.03 per unit of risk. If you would invest 4,980,000 in Tien Giang Investment on November 7, 2024 and sell it today you would earn a total of 470,000 from holding Tien Giang Investment or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tien Giang Investment vs. Saigon Beer Alcohol
Performance |
| Timeline |
| Tien Giang Investment |
| Saigon Beer Alcohol |
Tien Giang and Saigon Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tien Giang and Saigon Beer
The main advantage of trading using opposite Tien Giang and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang position performs unexpectedly, Saigon Beer 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 Saigon Beer will offset losses from the drop in Saigon Beer's long position.| Tien Giang vs. Transport and Industry | Tien Giang vs. Vietnam Technological And | Tien Giang vs. Innovative Technology Development | Tien Giang vs. Elcom Technology Communications |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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