Correlation Between Hanoi Beer and Tri Viet

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

Diversification Opportunities for Hanoi Beer and Tri Viet

0.08

Correlation Coefficient

Hanoi Beer  Tri Viet

Significant diversification

The 3 months correlation between Hanoi and Tri is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol and Tri Viet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Viet Management 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 Tri Viet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Viet Management has no effect on the direction of Hanoi Beer i.e., Hanoi Beer and Tri Viet go up and down completely randomly.

Pair Corralation between Hanoi Beer and Tri Viet

Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to generate 1.7 times more return on investment than Tri Viet. However, Hanoi Beer is 1.7 times more volatile than Tri Viet Management. It trades about 0.0 of its potential returns per unit of risk. Tri Viet Management is currently generating about -0.1 per unit of risk. If you would invest  3,870,000  in Hanoi Beer Alcohol on October 8, 2024 and sell it today you would lose (25,000) from holding Hanoi Beer Alcohol or give up 0.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Hanoi Beer Alcohol  vs.  Tri Viet Management

Hanoi Beer Alcohol

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanoi Beer Alcohol are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Tri Viet Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tri Viet Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Tri Viet 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 Tri Viet

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

The idea behind Hanoi Beer Alcohol and Tri Viet Management 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..