Correlation Between Saigon Beer and Industrial Urban

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

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

Diversification Opportunities for Saigon Beer and Industrial Urban

0.47

Correlation Coefficient

Saigon Beer  Industrial Urban

Very weak diversification

The 3 months correlation between Saigon and Industrial is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Saigon Beer Alcohol and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and Saigon 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 Saigon Beer Alcohol are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of Saigon Beer i.e., Saigon Beer and Industrial Urban go up and down completely randomly.

Pair Corralation between Saigon Beer and Industrial Urban

Assuming the 90 days trading horizon Saigon Beer is expected to generate 1.54 times less return on investment than Industrial Urban. But when comparing it to its historical volatility, Saigon Beer Alcohol is 5.75 times less risky than Industrial Urban. It trades about 0.05 of its potential returns per unit of risk. Industrial Urban Development is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,238,512  in Industrial Urban Development on September 13, 2024 and sell it today you would lose (83,512) from holding Industrial Urban Development or give up 2.58% of portfolio value over 90 days.

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

Saigon Beer Alcohol  vs.  Industrial Urban Development

Saigon Beer Alcohol

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saigon Beer Alcohol are ranked lower than 4 (%) 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.

Industrial Urban Dev

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Saigon Beer and Industrial Urban

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

The idea behind Saigon Beer Alcohol and Industrial Urban Development 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.