Correlation Between Hanoi Beer and Hai An

Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and Hai An 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 Hanoi Beer and Hai An into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanoi Beer Alcohol and Hai An Transport, you can compare the effects of market volatilities on Hanoi Beer and Hai An 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 Hanoi Beer with a short position of Hai An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Hai An.

Diversification Opportunities for Hanoi Beer and Hai An

-0.57

Correlation Coefficient

Hanoi Beer  Hai An

Excellent diversification

The 3 months correlation between Hanoi and Hai is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport and Hanoi 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 Hanoi Beer Alcohol are associated (or correlated) with Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Hai An go up and down completely randomly.

Pair Corralation between Hanoi Beer and Hai An

Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Hai An. In addition to that, Hanoi Beer is 1.46 times more volatile than Hai An Transport. It trades about 0.0 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.12 per unit of volatility. If you would invest  4,785,000  in Hai An Transport on December 3, 2024 and sell it today you would earn a total of  535,000  from holding Hai An Transport or generate 11.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.66%
Values	Daily Returns

Hanoi Beer Alcohol  vs.  Hai An Transport

Hanoi Beer Alcohol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanoi Beer Alcohol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hanoi Beer is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hai An Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hai An Transport are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Hai An may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hanoi Beer and Hai An

The main advantage of trading using opposite Hanoi Beer and Hai An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer position performs unexpectedly, Hai An 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 Hai An will offset losses from the drop in Hai An's long position.

The idea behind Hanoi Beer Alcohol and Hai An Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.