Correlation Between Nha Be and Saigon Beer

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

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

Diversification Opportunities for Nha Be and Saigon Beer

-0.24

Correlation Coefficient

Nha Be  Saigon Beer

Very good diversification

The 3 months correlation between Nha and Saigon is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nha Be Water 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 Nha Be 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 Nha Be Water 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 Nha Be i.e., Nha Be and Saigon Beer go up and down completely randomly.

Pair Corralation between Nha Be and Saigon Beer

Assuming the 90 days trading horizon Nha Be Water is expected to under-perform the Saigon Beer. In addition to that, Nha Be is 7.05 times more volatile than Saigon Beer Alcohol. It trades about -0.04 of its total potential returns per unit of risk. Saigon Beer Alcohol is currently generating about 0.0 per unit of volatility. If you would invest  5,577,902  in Saigon Beer Alcohol on September 29, 2024 and sell it today you would earn a total of  2,098  from holding Saigon Beer Alcohol or generate 0.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	41.54%
Values	Daily Returns

Nha Be Water  vs.  Saigon Beer Alcohol

Nha Be Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nha Be Water 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Saigon Beer Alcohol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saigon Beer Alcohol has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Nha Be and Saigon Beer

The main advantage of trading using opposite Nha Be and Saigon Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nha Be 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 Nha Be Water 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.