Correlation Between Hanoi Beer and POST TELECOMMU

Can any of the company-specific risk be diversified away by investing in both Hanoi Beer and POST TELECOMMU 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 POST TELECOMMU 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 POST TELECOMMU, you can compare the effects of market volatilities on Hanoi Beer and POST TELECOMMU 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 POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and POST TELECOMMU.

Diversification Opportunities for Hanoi Beer and POST TELECOMMU

-0.55

Correlation Coefficient

Hanoi Beer  POST TELECOMMU

Excellent diversification

The 3 months correlation between Hanoi and POST is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU 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 POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and POST TELECOMMU go up and down completely randomly.

Pair Corralation between Hanoi Beer and POST TELECOMMU

Assuming the 90 days trading horizon Hanoi Beer is expected to generate 57.14 times less return on investment than POST TELECOMMU. But when comparing it to its historical volatility, Hanoi Beer Alcohol is 2.33 times less risky than POST TELECOMMU. It trades about 0.0 of its potential returns per unit of risk. POST TELECOMMU is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,193,331  in POST TELECOMMU on December 4, 2024 and sell it today you would earn a total of  146,669  from holding POST TELECOMMU or generate 6.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.34%
Values	Daily Returns

Hanoi Beer Alcohol  vs.  POST TELECOMMU

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.

POST TELECOMMU

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in POST TELECOMMU are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, POST TELECOMMU is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hanoi Beer and POST TELECOMMU

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

The idea behind Hanoi Beer Alcohol and POST TELECOMMU 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.