Correlation Between Truong Thanh and Hanoi Beer
Can any of the company-specific risk be diversified away by investing in both Truong Thanh and Hanoi 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 Truong Thanh and Hanoi Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truong Thanh Furniture and Hanoi Beer Trading, you can compare the effects of market volatilities on Truong Thanh and Hanoi 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 Truong Thanh with a short position of Hanoi Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truong Thanh and Hanoi Beer.
Diversification Opportunities for Truong Thanh and Hanoi Beer
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Truong and Hanoi is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Truong Thanh Furniture and Hanoi Beer Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanoi Beer Trading and Truong Thanh 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 Truong Thanh Furniture are associated (or correlated) with Hanoi Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanoi Beer Trading has no effect on the direction of Truong Thanh i.e., Truong Thanh and Hanoi Beer go up and down completely randomly.
Pair Corralation between Truong Thanh and Hanoi Beer
Assuming the 90 days trading horizon Truong Thanh Furniture is expected to under-perform the Hanoi Beer. But the stock apears to be less risky and, when comparing its historical volatility, Truong Thanh Furniture is 1.95 times less risky than Hanoi Beer. The stock trades about -0.06 of its potential returns per unit of risk. The Hanoi Beer Trading is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,210,000 in Hanoi Beer Trading on September 15, 2024 and sell it today you would earn a total of 40,000 from holding Hanoi Beer Trading or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Truong Thanh Furniture vs. Hanoi Beer Trading
Performance |
| Timeline |
| Truong Thanh Furniture |
| Hanoi Beer Trading |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Truong Thanh and Hanoi Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truong Thanh and Hanoi Beer
The main advantage of trading using opposite Truong Thanh and Hanoi Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truong Thanh position performs unexpectedly, Hanoi 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 Hanoi Beer will offset losses from the drop in Hanoi Beer's long position.| Truong Thanh vs. FIT INVEST JSC | Truong Thanh vs. Damsan JSC | Truong Thanh vs. An Phat Plastic | Truong Thanh vs. Alphanam ME |
| Hanoi Beer vs. Song Hong Garment | Hanoi Beer vs. Alphanam ME | Hanoi Beer vs. Hochiminh City Metal | Hanoi Beer vs. Atesco Industrial Cartering |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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