Correlation Between Kien Giang and Saigon Beer

Can any of the company-specific risk be diversified away by investing in both Kien 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 Kien 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 Kien Giang Construction and Saigon Beer Alcohol, you can compare the effects of market volatilities on Kien 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 Kien Giang with a short position of Saigon Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kien Giang and Saigon Beer.

Diversification Opportunities for Kien Giang and Saigon Beer

-0.58

Correlation Coefficient

Kien Giang  Saigon Beer

Excellent diversification

The 3 months correlation between Kien and Saigon is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kien Giang Construction 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 Kien 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 Kien Giang Construction 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 Kien Giang i.e., Kien Giang and Saigon Beer go up and down completely randomly.

Pair Corralation between Kien Giang and Saigon Beer

Assuming the 90 days trading horizon Kien Giang Construction is expected to generate 1.33 times more return on investment than Saigon Beer. However, Kien Giang is 1.33 times more volatile than Saigon Beer Alcohol. It trades about -0.07 of its potential returns per unit of risk. Saigon Beer Alcohol is currently generating about -0.26 per unit of risk. If you would invest  2,295,000  in Kien Giang Construction on October 7, 2024 and sell it today you would lose (40,000) from holding Kien Giang Construction or give up 1.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kien Giang Construction  vs.  Saigon Beer Alcohol

Kien Giang Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kien Giang Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Saigon Beer Alcohol

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Beer Alcohol are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Saigon Beer is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kien Giang and Saigon Beer

The main advantage of trading using opposite Kien Giang and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kien 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.

The idea behind Kien Giang Construction and Saigon Beer Alcohol 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.